ANKARA

Global airline revenues next year are projected to exceed $1 trillion for the first time, reflecting growing passenger demand and improved profitability despite ongoing challenges, said the International Air Transport Association (IATA) on Tuesday.

The figure marked an expected 4.4% annual growth in 2025, the IATA said in its latest financial outlook report.

The IATA projected a $36.6 billion net profit for the industry next year, representing a 3.6% net profit margin.

This is an improvement from the $31.5 billion profit anticipated in 2024. However, airlines will continue to operate on thin margins, earning an average of just $7 per passenger, up from $6.40 in 2024.

Crossing the trillion-dollar revenue mark underscores aviation's critical role in the global economy, said Willie Walsh, the IATA’s director general.

But it is crucial to remember that airlines face $940 billion in costs and significant external pressures, including supply chain issues and rising taxes, he added.

Passenger growth reaches new heights

Next year passenger numbers are projected to grow 6.7% year-on-year to exceed 5 billion for the first time, and aircraft departures are expected to reach 40 million.

This surge in connectivity will catalyze economic activity, particularly in sectors like hospitality, retail, and logistics, said Walsh.

Air travel creates jobs and fuels economies, he said, adding: "Airlines are the core of a global aviation value chain that employs 86.5 million people and generates $4.1 trillion in economic impact, accounting for 3.9% of global GDP (in 2023)."

While the outlook is optimistic, Walsh warned of risks that could hinder progress. Persistent supply chain disruptions, infrastructure inefficiencies, and rising costs, including labor and compliance with environmental standards, remain significant concerns. Jet fuel prices, while lower than recent years, will still account for over a quarter of operating costs in 2025.

Additionally, airlines will face rising tax burdens as pandemic-era tax offsets are depleted.

Despite challenges, the IATA expects continued growth in both passenger and cargo operations. Cargo volumes are forecast to rise by 5.8%, driven by e-commerce and geopolitical shifts. The average airfare, including ancillary services, is expected to fall 1.8% to $380, highlighting the industry's focus on efficiency and value for consumers.