IATA’s 2025 outlook dims despite higher income prediction: Global airlines are expected to see a net income of USD 36 bn in FY 2025, a notch down from last December’s prediction of USD 36.6 bn due to trade uncertainty and slumping consumer demand, according to a statement by the International Air Transport Association (IATA). Revenues are expected to reach USD 979 bn in the same period, a downward revision from the predicted USD 1 tn. Both the bottom line and topline predictions are higher than last year’s results.

Jet fuel cost dip saves the day: The price of jet fuel has dropped by 13% compared to 2024 and is now 1% lower than initially estimated, offsetting what could’ve been a further drop in earnings. A reduced fuel bill for 2025 will translate to a USD 25 bn reduction in costs compared to 2024 — IATA assumes an average of USD 86 per barrel, compared to last year’s USD 99 per barrel.

Macroeconomic factors: Despite an expected drop in global GDP growth to 2.5% in 2025, airline profitability could still surge on the back of dropping oil prices. Strong employment and moderating inflation are forecasted to keep fuel demand high.

Air cargo revenues will slip: The IATA expects revenues from air cargo activity to drop 4.7% y-o-y to USD 142 bn in 2025 on the back of weaker GDP growth and elevated tariffs. Cargo yield is also expected to drop by 5.2% — a decline attributed to both slower demand growth and lower oil prices.

Sentiments are positive: “The first half of 2025 has brought significant uncertainties to global markets,” IATA’s Director General Willie Walsh said. “Nonetheless… it will still be a better year for airlines than 2024, although slightly below our previous projections… Moreover, we anticipate airlines flying more people and more cargo in 2025 than they did in 2024, even if previous demand projections have been dented by trade tensions and falls in consumer confidence,” Walsh said.

Supply chain woes will persist: While roughly 1.7k aircraft are expected to be delivered in 2025 — a record since 2018 — this figure is nearly 26% below year-ago estimates. Further downward revisions are expected due to persistent supply chain issues, likely extending through 2025 and possibly to the decade's end, the statement read.

The region should fare well: The Middle East is projected to have the highest net income per passenger, driven by strong economic performance and high resultant demand, the statement read. However, aircraft delivery delays will cap capacity growth.

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