Cost of air travel has dropped 40% over a decade, says IATA chief Walsh

Business Standard

2 days ago

Leaders from the global aviation sector gathered in New Delhi for the International Air Transport Association (IATA) Annual General Meeting and the World Air Transport Summit, held from June 1 to 3.
This marked the first time in 42 years that the IATA AGM was held in India, the last being in 1983. IATA represents approximately 350 airlines, accounting for over 80 per cent of international air traffic.
The 2025 event, hosted by IndiGo, welcomed around 1,700 participants from the aviation industry, government and media.
According to IATA, India's aviation sector directly employs 369,700 individuals and contributes $5.6 billion to the country's gross domestic product (GDP).
PM Modi highlights India's aviation transformation
Addressing the IATA AGM, Prime Minister Narendra Modi said, 'Today, India is emerging as a global leader in space–aviation convergence.'
He highlighted that India's civil aviation sector has undergone major transformation in the past decade. 'This summit and dialogue serve as a platform not only for aviation but also for advancing global cooperation, climate commitments and equitable growth,' he said.
PM Modi added that the discussions would shape the future of global aviation and noted that 'the aspirations of the 21st century continue to evolve beyond conventional travel'. Emphasising the role of innovation, he said, 'As speed increases, distant destinations are becoming our destiny.'
Airline profits projected to rise in 2025
IATA projected global airline profits will reach $36 billion in 2025, up from $32.4 billion in 2024. However, this falls slightly short of the $36.6 billion forecast made in December 2024.
Director General Willie Walsh underscored that airspace should not be used in trade disputes. He also raised concerns about supply chain challenges, pointing to a backlog of 17,000 aircraft and 1,100 aircraft under 10 years old currently in storage. The global fleet replacement rate remains at 3 per cent.
Total industry revenue is expected to rise to $979 billion in 2025—a 1.3 per cent increase over the previous year.
Air cargo growth to slow amid trade restrictions
IATA warned that a global GDP slowdown, largely due to protectionist trade measures such as tariffs, is likely to affect air cargo performance in 2025. Growth in air cargo is forecast to decline to 0.7 per cent, down from 11.3 per cent in 2024.
Cargo yields are expected to fall by 5.2 per cent, impacted by softer demand growth and lower oil prices. Nonetheless, cargo demand saw a 5.8 per cent year-on-year increase as of April 2025. IATA also flagged ongoing uncertainty related to global trade tensions.
Despite persistent tax and cost pressures, the real cost of air travel has fallen by 40 per cent over the last decade.
Walsh commented, 'The litmus test for any regulation is cost–benefit analysis. As business leaders, we take this much more seriously than regulators. They are not playing with their own money, and the difference between political success and solving a problem is often wide. That makes bad regulation far too prevalent.'
IATA also raised concerns about India's complex taxation system, calling for greater clarity for airlines operating in the country. These remarks come in light of recent tax notices issued to foreign carriers.
Speaking at the AGM, Walsh said India's aviation market is expected to grow at a faster rate than China's. Airlines are expanding their fleets and networks to meet rising demand.