Airlines set to record higher profits of $36 billion in 2025, says IATA, ET Infra
Efficiency, fuel and demand trends
Advt
Fleet constraints and geopolitical risk
Advt
By ,
ETInfra
Join the community of 2M+ industry professionals Subscribe to our newsletter to get latest insights & analysis.
Get updates on your preferred social platform Follow us for the latest news, insider access to events and more.
The global airline industry is projected to earn net profits of $36 billion, up from $32.4 billion in 2024, the International Air Transport Association said in its latest financial outlook for 2025.As per the report, net profit margins are expected at 3.7 per cent, up from 3.4 per cent in 2024, while return on invested capital is projected at 6.7 per cent, marginally above 2024 levels.Total traveller numbers are expected to reach 4.99 billion in 2025, and air cargo volumes 69 million tonnes, the report noted. These are higher than 2024 levels but lower than previous projections.Willie Walsh, IATA 's Director General, said, 'The first half of 2025 has brought uncertainties to markets. Nonetheless, by many measures including net profits, it will still be a better year for airlines than 2024, although slightly below our previous projections. The biggest positive driver is the price of jet fuel which has fallen 13 per cent compared with 2024. That's still about half the average profitability across all industries. But considering the headwinds, it's a strong result that demonstrates the resilience that airlines have worked hard to fortify.'IATA noted that passenger load factors are expected to reach 84 per cent in 2025. Passenger revenues are projected to be $693 billion, supported by ancillary revenues of $144 billion. Passenger growth, measured in Revenue Passenger Kilometres, is expected at 5.8 per cent. Passenger yields are forecast to fall by 4 per cent. The real average return airfare in 2025 is expected to be $374.Polling data in April 2025 showed 40 per cent of respondents planned to travel more, while 47 per cent expected to spend more on travel in the next 12 months. Some 68 per cent of business travellers said trade tensions would not impact their travel plans.Cargo revenues are forecast to fall to $142 billion, with cargo growth slowing to 0.7 per cent and cargo yields expected to fall by 5.2 per cent. Trade policies are cited as a key factor.Fuel costs are projected at $86 per barrel, leading to a fuel bill of $236 billion. Sustainable Aviation Fuel (SAF) production is forecast to double to 2 million tonnes, though still representing 0.7 per cent of total airline fuel use. SAF costs remain higher than traditional jet fuel.Walsh criticised fuel suppliers, stating, 'Fuel suppliers must stop profiteering on the limited SAF supplies available and ramp up production to meet the legitimate needs of their customers.'The Carbon Offsetting and Reduction Scheme for International Aviation ( CORSIA ) is expected to cost airlines $1 billion in 2025. Only Guyana has issued eligible credits under the scheme.Fleet expansion continues to face constraints. The aircraft backlog has exceeded 17,000 units, with the average fleet age now at 15 years. Aircraft deliveries in 2025 are expected at 1,692 units, down from previous estimates.Walsh commented, 'Manufacturers continue to let their airline customers down. Every airline is frustrated that these problems have persisted for so long.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
India Today
3 hours ago
- India Today
Flying cheaper than rail? How India's air travel revolution is taking off
A quiet change has taken place in an economy wherein travelling by train has for generations offered budget travellers the means to move about. Flying has become in India, at times, even cheaper than the cost of a high-end train ticket, notes a report by the International Air Transport Association (IATA). Real airfares have plummeted by 25 per cent between 2011 and 2023, making the skies more accessible to thousands who used to regard air travel as numbers are striking. In peak season, the fare of Third AC train travel will be about Rs 3,000-Rs 3,500 from Delhi to Mumbai. On several days, the same route is being flown by a low-cost airline selling seats at a lower price. Add in the time saved—nearly two hours in air vs over 15 hours on rail—and the math adds up. Well, air travel is no longer a high-status affair. It's about IATA report, released on June 2, says 111 flights were taken per 1,000 Indians in 2023. This represents quite a substantial increase for a nation that just a decade ago found a minority of its population taking a flight ever. Indians, in turn, are now availing international flights with much greater ease. These changes—far shorter term in their effect—do reflect a broader evolution of aviation in India, which is witnessing a democratising of the sector via lower fares, more extensive networks and governmental what does this mean beyond the passenger stats? Addressing the IATA annual general meeting in New Delhi on June 2, Prime Minister Narendra Modi placed the Indian aviation story in a larger global framework. He said India should not be seen as just an aviation market but rather as a leader in the value chain of the sector—not only should we 'Make in India' but also 'Design in India'.advertisement Modi's message was explicit: India is not merely flying more—India wants the sky. In recent years, the government has introduced reforms to identify aviation as an engine of economic growth and global integration. Modi said Indian aviation laws were being brought at par with international best practices, with easy and a clear tax structure and compliance. He said this is a hugely attractive investment opportunity for large global aviation already contributes a huge amount to the Indian economy. As per the IATA report, the Indian aviation industry contributes $53.6 billion (1.5 per cent) to the country's Gross Domestic Product (GDP). This includes $5.6 billion in direct core aviation activities, $21 billion from supply chain and employee spending and $27.1 billion in aviation-related tourism. It also accounts for 7.7 million jobs—369,700 of them being direct aviation jobs and 5 million in tourism. It is said to be one of those few sectors in India where for every 100 direct jobs, over 600 indirect jobs are created in the also emphasised on turning India into a global centre for MRO (maintenance, repair and overhaul). India is fast expediting this journey and by 2030 aiming for a $4 billion MRO hub, he added. From 96 in 2014, India today has 154 MRO facilities, thanks 100 per cent FDI under the automatic route and reforms such as reduction in Goods and Services Tax (GST) and rationalisation in and connectivity are equally important parts of the jigsaw. India is now the sixth largest air cargo market in the world with 3.3 million tonnes of air cargo handled in 2023. Air freight used to be an ancillary at best, but with the rise of industries such as pharma, electronics and e-commerce, it has become a central logistical engine. There are also growing international linkages with India. With 521 international outbound flights daily, the country is linked to 58 countries. India has 103 international routes and in just five years, the country has been placed 10th in the international aviation market. In 2024, 33.9 million international passengers flew out of as exciting as these advances are, the core value of aviation is much more than that. Air travel may be the only dependable link to the national economy in the far-off northeastern states or hilly regions where road and rail links are not up to the mark. Air access is vital during emergencies, disaster or in case of an urgent medical transfer. In this context, regional air links have burgeoned in the past four years, thanks to the government's UDAN scheme, with planes now flying into towns such as Darbhanga, Jharsuguda and Rupsi—previously unimaginable on the national air is aviation more than just a mode of transportation? Because it's a force multiplier, a safety net, a conduit between desire and delivery. The remarks made by Modi at the IATA event also covered India's efforts to become a hub for aircraft leasing. Referring to the recent legislation framed to provide tax incentives and legal certainty to global lessors, he remarked that these measures had turned India into a more favourable destination for leasing yet, challenges remain. In large cities, airport infrastructure is pushed to the limit, pilot shortages are around the corner, and we are asked to ignore the environmental impact of flying. But the wind is undeniably at their back. Some 10 years ago, the Indian aviation story was a tale of private sector churn and regulatory ambiguity. Today, it is a lot about opportunity, scale and is transforming into a node of value creation in the global aviation ecosystem. And so, for millions of Indians, a dream has now become a daily choice: to fly or to take the train? And more and more, the skies seem to be the ones to India Today MagazineTrending Reel
NDTV
4 hours ago
- NDTV
IATA 2025: India Projects Major Growth In Air Travel And Cargo
New Delhi: India hosted the International Air Transport Association's (IATA) 81st Annual General Meeting at Bharat Mandapam, New Delhi. After a 42-year gap, the event returned to India with Prime Minister Narendra Modi delivering the keynote address and positioning the country as a rising global leader in aviation and space-tech. Speaking at the event, PM Modi said India is emerging as a global leader in aviation and space convergence. He added that India is the third-largest domestic aviation market, serving 240 million passengers annually, expected to reach 500 million by 2030. He credited the UDAN scheme for helping over 15 million, many first-time flyers, afford air travel. Operational airports have grown from 74 in 2014 to 162 today. Indian airlines have ordered 2,000+ new aircraft, and the MRO sector now has 154 facilities. He cited three growth pillars: a large, growing market; a skilled young workforce in AI, robotics, and clean energy; and strong policy support including tax reforms and 100 per cent FDI in aviation. The Prime Minister also stressed India's commitment to sustainable flying through green fuel research and innovations like Digi Yatra, a facial recognition travel system. He noted India's inclusive aviation sector, with women making up 15 per cent of pilots and 86 per cent of cabin crew, well above global averages. Highlights Of IATA 2025 Leadership Transition At IATA Luis Gallego, CEO of International Airlines Group, took over as Chair of the IATA Board from Pieter Elbers, CEO of IndiGo. His one-year term started after the AGM. Financial Outlook And Industry Challenges IATA forecasts global airline profits of $36 billion in 2025, up from $32.4 billion in 2024 but below the earlier $36.6 billion estimate. Challenges include trade tensions, aircraft delivery delays, and supply chain issues. Industry revenues are expected to hit $979 billion, with expenses at $913 billion. Sustainability And Innovation Initiatives The aviation industry reaffirmed its goal to reach net-zero carbon emissions by 2050. That said, Sustainable Aviation Fuel (SAF) will cover only 0.7 per cent of fuel needs in 2025, showing more efforts are needed. Enhanced Global Connectivity Air India and Air Mauritius expanded their codeshare partnership starting July 1, to improve travel links between India and Africa with better network integration. 2025 Diversity & Inclusion Award Winners IATA honoured Claudia Zapata-Cardone, Katherine Moloney, and Air Canada for their outstanding efforts in promoting diversity and inclusion in aviation. CFM RISE Program's Open Fan model One of the key highlights at IATA 2025 was CFM RISE (Revolutionary Innovation for Sustainable Engines) program's Open Fan Model. Aimed at developing the next generation of aircraft engines, the CFM RISE program's Open Fan model, built through a joint venture between GE Aerospace and Safran Aircraft Engines, promises a major leap in fuel efficiency. Here is what makes the CFM RISE Program special: Open Fan Design: The engine uses a unique open fan architecture, which reduces drag and increases efficiency. The fan blades are made of lightweight carbon-fibre composites. Green Compatibility: The core is being designed for compatibility with next-generation fuels, including unblended sustainable aviation fuel (SAF), as well as with hybrid electric systems. Global Testing: Over 250 tests have been completed worldwide. A model engine was recently wind tunnel-tested in France, and critical turbine components have been through 3,000+ test cycles. Reducing Non-CO2 Emissions: GE Aerospace is working with NASA to study contrails and non-CO2 emissions using advanced lidar technology. Flight Testing This Decade: Airbus and CFM will conduct flight tests later this decade to evaluate the engine in real-world conditions. India Calls The World To Invest PM Modi invited global companies to invest in India's aviation sector, highlighting plans for a $4 billion MRO hub and supportive policies at Gift City. He promoted India as a full-service aviation partner, from design and manufacturing to services and sustainability, urging leaders to 'Make in India' and 'Design in India.' The 82nd IATA AGM will take place in Rio de Janeiro, Brazil, in June 2026.
&w=3840&q=100)
Business Standard
9 hours ago
- Business Standard
Rising missile threats, airspace closures increase pressure on airlines
Proliferating conflict zones are an increasing burden on airline operations and profitability, executives say, as carriers grapple with missiles and drones, airspace closures, location spoofing and the shoot-down of another passenger flight. Airlines are racking up costs and losing market share from cancelled flights and expensive re-routings, often at short notice. The aviation industry, which prides itself on its safety performance, is investing more in data and security planning. "Flight planning in this kind of environment is extremely difficult … The airline industry thrives on predictability, and the absence of this will always drive greater cost," said Guy Murray, who leads aviation security at European carrier TUI Airline. With increasing airspace closures around Russia and Ukraine, throughout the Middle East, between India and Pakistan and in parts of Africa, airlines are left with fewer route options. "Compared to five years ago, more than half of the countries being overflown on a typical Europe-Asia flight would now need to be carefully reviewed before each flight," said Mark Zee, founder of OPSGROUP, a membership-based organisation that shares flight risk information. The Israeli-Palestinian conflict in the Middle East since October 2023 led to commercial aviation sharing the skies with short-notice barrages of drones and missiles across major flight paths - some of which were reportedly close enough to be seen by pilots and passengers. Russian airports, including in Moscow, are now regularly shut down for brief periods due to drone activity, while interference with navigation systems, known as GPS spoofing or jamming, is surging around political fault lines worldwide. When hostilities broke out between India and Pakistan last month, the neighbours blocked each other's aircraft from their respective airspace. "Airspace should not be used as a retaliatory tool, but it is," Nick Careen, International Air Transport Association (IATA) senior vice president for operations, safety and security, told reporters at the airline body's annual meeting in New Delhi on Tuesday. Isidre Porqueras, chief operating officer at Indian carrier IndiGo, said the recent diversions were undoing efforts to reduce emissions and increase airline efficiencies. Worst-case scenario Finances aside, civil aviation's worst-case scenario is a plane being hit, accidentally or intentionally, by weaponry. In December, an Azerbaijan Airlines flight crashed in Kazakhstan, killing 38 people. The plane was accidentally shot down by Russian air defences, according to Azerbaijan's president and Reuters sources. In October, a cargo plane was shot down in Sudan, killing five people. Six commercial aircraft have been shot down, with three near-misses since 2001, according to aviation risk consultancy Osprey Flight Solutions. Governments need to share information more effectively to keep civil aviation secure as conflict zones proliferate, IATA Director General Willie Walsh said this week. Safety statistics used by the commercial aviation industry show a steady decline in accidents over the past two decades, but these do not include security-related incidents such as being hit by weaponry. IATA said in February that accidents and incidents related to conflict zones were a top concern for aviation safety requiring urgent global coordination. Tough Choices Each airline decides where to travel based on a patchwork of government notices, security advisers, and information-sharing between carriers and states, leading to divergent policies. The closure of Russian airspace to most Western carriers since the outbreak of war in Ukraine in 2022 put them at a cost disadvantage compared to airlines from places like China, India and the Middle East that continue to take shorter northern routes that need less fuel and fewer crew. Shifting risk calculations mean Singapore Airlines' flight SQ326 from Singapore to Amsterdam has used three different routes into Europe in just over a year, Flightradar24 tracking data shows. When reciprocal missile and drone attacks broke out between Iran and Israel in April 2024, it started crossing previously avoided Afghanistan instead of Iran. Last month, its route shifted again to avoid Pakistan's airspace as conflict escalated between India and Pakistan. Flight SQ326 now reaches Europe via the Persian Gulf and Iraq. Singapore Airlines did not respond immediately to a request for comment. Pilots and flight attendants are also worried about how the patchwork of shifting risk might impact their safety. "IATA says airlines should decide if it's safe to fly over conflict zones, not regulators. But history shows commercial pressures can cloud those decisions," said Paul Reuter, vice president of the European Cockpit Association, which represents pilots. Flight crew typically have the right to refuse a trip due to concerns about airspace, whether over weather or conflict zones, IATA security head Careen said. "Most airlines, in fact, I would say the vast majority of them, do not want crew on an aircraft if they don't feel comfortable flying," he said. (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
