Iata revises traffic and profit forecasts for 2025

Airline association Iata has revised its air traffic growth, airline revenue and profit forecasts for this year due to the uncertainty around the US Trump administration’s trade policy and its economic impacts.

 

Iata released an updated industry financial outlook at its annual general meeting (AGM) in Delhi on Monday, revising its December forecast of 5.22 billion air passengers this year down to just under five billion, and projecting total airline revenue at $979 billion, down from more than $1 trillion.

 

Passenger numbers would still be up 4% on last year, according to the latest forecast, with airlines projected to make a collective profit of $36 billion – up from $32.4 billion in 2024, but down from the $36.6 billion forecast in December.

 

Iata director-general Willie Walsh noted: “The first half of 2025 has brought significant uncertainties to global markets.”

 

But he said: “It will still be a better year for airlines than 2024 even if previous demand projections have been dented by trade tensions and falls in consumer confidence.

 

“Considering the headwinds, it’s a strong result that demonstrates the resilience of airlines.”

 

However, Walsh argued an industry net profit margin of 3.7% for the year, up from 3.4% in 2024, would be “about half the average profitability across all industries”.

 

He pointed out: “A $36 billion profit equates to just $7.20 per passenger per segment.

 

“It’s a thin buffer and any new tax, increase in airport or navigation charge, demand shock or costly regulation will put the industry’s resilience to the test.”

 

Iata forecasts passenger revenues will hit a record high of $693 billion in 2025, up 1.6% on 2024.

 

The average passenger load factor is predicted to reach a record high of 84%, as capacity remains tight due to delays in delivery of new aircraft.

 

An increase in profit margin is expected due to the fall in the price of oil, although Iata chief economist Marie Owens Thomsen pointed out this does not feed through directly to the price of jet fuel.

 

Passenger yields are expected to fall 4% year on year on average.

 

All regions are expected to see airlines report a collective net profit in 2025, although profitability will vary widely by carrier and region.

 

Middle East carriers are forecast to be the strongest, with a net profit margin of 8.7%. Iata forecasts European carriers will see an average 6% profit margin.