Tourexpi
Global airline revenues next year to exceed $1T, says industry group
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.
Image
Credit: © AA
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