The International Air Transport Association (IATA) has released its financial outlook for 2025, projecting a slight improvement in profitability despite persistent cost and supply chain challenges.
Key highlights include a flat 3.6% net profit margin of $36.6 billion, a modest increase from the anticipated $31.5 billion net profit in 2024, which corresponds to a 3.3% net profit margin.
Based on this, the profit per passenger would average $7.0, down from the $7.9 peak in 2023 but an improvement from $6.4 in 2024.
Projected operating profit for airlines next year could reach $67.5 billion, resulting in a net operating margin of 6.7%, up from the expected 6.4% in 2024.
In terms of return on invested capital (ROIC), the IATA forecast anticipated it at 6.8%, a slight increase from 6.6% in 2024. However, this remains below the industry’s weighted average cost of capital. ROIC is strongest for airlines in Europe, the Middle East, and Latin America.
Total industry revenues may surpass the $1-trillion mark for the first time, reaching $1.007 trillion, a 4.4% increase from 2024 while expenses at 4.0% growing to $940 billion.
The modest growth is based on a forecast of 5.2 billion passengers or 6.7% higher than the projected 2024 figure. This is the first time passenger numbers will exceed five billion, IATA said.
Cargo volumes could rise 5.8% to reach 72.5 million tonnes, a 5.8% increase from 2024.
IATA Director General Willie Walsh emphasized the significance of these figures, stating, “In 2025, industry revenues will exceed $1 trillion for the first time. It’s also important to put that into perspective. A trillion dollars is a lot—almost 1% of the global economy. That makes airlines a strategically important industry.”
Walsh also highlighted the thin profit margins, noting, “Airlines carry $940 billion in costs, not to mention interest and taxes. They retain a net profit margin of just 3.6%. Put another way, the buffer between profit and loss, even in the good year that we are expecting of 2025, is just $7 per passenger. With margins that thin, airlines must continue to watch every cost and insist on similar efficiency across the supply chain—especially from our monopoly infrastructure suppliers who all too often let us down on performance and efficiency.”
This outlook underscores the delicate balance airlines must maintain to navigate financial pressures while striving for profitability and growth.
