IATA cuts airlines' profit forecast, flags 'thin buffer' against future shocks
Jun. 02, 2025 5:44 AM ET
The airline industry has lowered its forecast for net profits this year amid global headwinds, but profitability is still expected to improve over 2024 due to lower fuel prices and record passenger numbers.
The International Air Transport Association expects airlines' net profits to reach $36B this year, up 11% Y/Y but slightly lower than its previous forecast of $36.6B.
"Earning a $36B profit is significant. But that equates to just $7.20 per passenger per segment," IATA's director-general Willie Walsh said. "It's still a thin buffer and any new tax, increase in airport or navigation charge, demand shock or costly regulation will quickly put the industry's resilience to the test."
Total airline revenues are expected to hit a record $979B in 2025, up 1.3% Y/Y but below the IATA's previous forecast of $1T. Total traveler numbers are projected to reach a record 4.99B, up 4% Y/Y but lower than the prior estimate of 5.22B.
Walsh noted that the biggest positive driver is the price of jet fuel, which has fallen 13% Y/Y. Jet fuel is expected to average $86/barrel in 2025, well below the $99 average in 2024.
"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 added.
Fleet expansion and modernization remains challenging amid supply chain issues, which could potentially persist to the end of the decade.
"Manufacturers continue to let their airline customers down. Every airline is frustrated that these problems have persisted so long. And indications that it could take until the end of the decade to fix them are off-the-chart unacceptable," Walsh said.
IATA members include United Airlines ( UAL), American Airlines ( AAL), Delta Air Lines ( DAL), Southwest ( LUV), JetBlue ( JBLU), Alaska Airlines ( ALK), FedEx Express ( FDX) and UPS Airlines ( UPS).
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