Global airline industry to see record revenues despite ongoing supply chain struggles, says IATA

The International Air Transport Association (IATA) projects the global airline industry will achieve record revenues of US$1.007 trillion in 2025, even as supply chain challenges continue to constrain growth and elevate costs.

Releasing its financial outlook, IATA forecasts a net profit of US$36.6 billion in 2025, marking a modest improvement over the US$31.5 billion expected in 2024. Despite this progress, airlines face persistent challenges from infrastructure inefficiencies, regulatory hurdles and the lingering impacts of supply chain disruptions.

“The profitability we are expecting in 2025 will be hard-earned,” said Willie Walsh, IATA’s director general. “Supply chain issues are limiting growth opportunities and driving up costs, especially in areas like aircraft leasing and maintenance. Airlines must also contend with monopoly infrastructure providers that frequently fail to deliver the efficiency required for such a tight-margin industry.”

Unresolved supply chain disruptions are compelling airlines to maintain a cautious approach to capacity growth, impacting their ability to meet surging passenger and cargo demand. Passenger numbers are expected to exceed five billion for the first time in 2025, a 6.7 per cent increase over 2024, while cargo volumes are forecast to grow 5.8 per cent to 72.5 million tonnes.

However, delays in aircraft deliveries, compounded by maintenance challenges for aging fleets, are driving up operational costs. Non-fuel expenses, including labour and maintenance, are expected to rise by 7.6 per cent in 2025 to US$692 billion.

Meanwhile, airlines are set to benefit from declining jet fuel prices, which are projected to average US$87 per barrel in 2025, down from US$99 in 2024. Yet, fuel will still account for 26.4 per cent of operating costs, making it the industry’s second-largest expense after labor.

Despite crossing the US$1 trillion revenue threshold, the industry’s average profit margin in 2025 is expected to remain slim at 3.6 per cent. IATA emphasized the need for efficiency across the aviation supply chain, particularly from infrastructure providers, to bolster profitability.

“The buffer between profit and loss is just $7 per passenger,” Walsh said. “Thin margins underscore the importance of cost control—not just by airlines but across the entire supply chain.”

The airline industry’s growth is expected to contribute significantly to global connectivity and economic activity. By 2025, airlines will support an estimated 86.5 million jobs and generate $4.1 trillion in economic impact, representing 3.9% of global GDP.

This expansion in air travel and cargo connectivity is expected to boost sectors such as retail, hospitality and e-commerce, particularly in regions like Asia, where geopolitical uncertainties in maritime shipping are driving demand for air cargo.

Outlook for 2025

While the industry outlook remains positive, risks persist. IATA highlighted geopolitical tensions, potential trade disruptions under the incoming Trump administration in the U.S., and the possibility of oil price volatility as key concerns.

All global regions are projected to post net profits in 2025, with the Middle East leading in profitability. North America, despite supply chain vulnerabilities in the low-cost carrier sector, will continue to generate the highest absolute profits.

“Airlines are integral to the global economy,” said Walsh. “The continued resilience of the industry, despite external challenges, is a testament to its strategic importance and the hard work of those within it.”