Global airline profits are expected to total $36bn during 2025, down from a previous estimate of $36.6bn that was made in December last year, with tariffs and supply chain constraints likely to dampen demand.
IATA made these forecast adjustments during its airline industry financial outlook, noting that despite this revised estimate, global airline profit during 2025 will be up from $32.4bn that was recorded during 2024.
The airline trade association said that total airline revenues for the year will reach a record high of $979bn, 1.3% on 2024, but below the $1 trillion previously projected. Passenger revenues are expected to reach $693bn in 2025, a 1.6% increase from 2024, an all-time high. This will be bolstered by an additional $144bn in ancillary revenues, a 6.7% increase on figures from 2024.
Since estimates were last made in December, the industry has been widely impacted by new trade measures implemented by the US in April, with carriers pulling forecasts and capacity for the year.
“The first half of 2025 has brought significant uncertainties to global markets. Nonetheless, by many measures including net profits, it will still be a better year for airlines than 2024, although slightly below our previous projections,” said Willie Walsh, IATA’s director general. “Earning a $36bn profit is significant. But that equates to just $7.20 per passenger per segment.”
Regionally, North American carriers are projected to lead the global airline industry in profitability, with forecasted earnings reaching $12.7bn in 2025 - a 4% increase compared to the previous year.
Total expenses for the industry are forecast to reach $913bn in 2025, up 1% from 2024 but again fall below earlier projections of $940bn, as lower fuel prices help offset rising aircraft maintenance costs.
Within the financial outlook, IATA noted that supply chain constraints have had significant negative impacts on airlines - driving-up leasing costs, increasing the average fleet age to 15 years (from 13 in 2015), cutting the fleet replacement rate to half the 5-6% of 2020, and reducing the efficiency of fleet utilisation.
It is expected that this year 1,692 aircraft will be delivered. Although this would mark the highest level since 2018, it is almost 26% lower than estimates made a year ago. “Further downward revisions are likely, given that supply chain issues are expected to persist in 2025 and possibly to the end of the decade,” IATA stated.
In addition to aircraft delivery headwinds, engine problems and a shortage of spare parts are also expected to exacerbate measures, causing record-high groundings of certain aircraft types. The number of aircraft younger than ten years in storage is currently more than 1,100, constituting 3.8% of the total fleet compared with 1.3% between 2015 and 2018.
Nearly 70% of these grounded aircraft are equipped with PW1000G engines.
“Manufacturers continue to let their airline customers down. Every airline is frustrated that these problems have persisted so long. And indications that it could take until the end of the decade to fix them are off-the-chart unacceptable!” Walsh added.
IATA also expects sustainable aviation fuel (SAF) production to grow to two million tonnes this year, accounting for just 0.7% of airline fuel use. IATA estimates that the average cost of SAF in 2024 was 3.1 times that of jet fuel, for a total additional cost of $1.6 bn.