What Does Future Hold For Aviation In 2025?

Passenger numbers are expected to cross five billion, underscoring aviation's strategic importance to the global economy. While airlines benefit from growing connectivity and ad-vancements in technology, challenges such as supply chain constraints, infrastructure ineffi-ciencies, and rising costs demand vigilant cost control and innovation

The International Air Transport Association (IATA) announced its financial outlook for the global airline industry in 2025, which shows a slight strengthening of profitability amid ongoing cost and supply chain challenges. Highlights include:

Net profits are expected to be $36.6 billion in 2025 for a 3.6 per cent net profit margin. That is a slight improvement from the expected $31.5 billion net profit in 2024 (3.3 per cent net profit margin). Average net profit per passenger is expected to be $7.0 (below the $7.9 high in 2023 but an improvement from $6.4 in 2024).

Operating profit in 2025 is expected to be $67.5 billion for a net operating margin of 6.7 per cent (improved from 6.4 per cent expected in 2024).

The return on invested capital (ROIC) for the global industry is expected to be 6.8 per cent in 2025. While this is an improvement from the 2024 ROIC of 6.6 per cent, the returns for the industry at the global level remain below the weighted average cost of capital. ROIC is the strongest for airlines in Europe, the Middle East, and Latin America, where it did exceed the cost of capital.

Total industry revenues are expected to be $1.007 trillion. That is an increase of 4.4 per cent from 2024 and will be the first time that industry revenues top the $1 trillion mark. Expenses are expected to grow by 4 per cent to $940 billion. Passenger numbers are expected to reach 5.2 billion in 2025, a 6.7 per cent rise compared to 2024 and the first time that the number of passengers has exceeded the five billion mark.

Cargo volumes are expected to reach 72.5 million tonnes, a 5.8 per cent increase from 2024. “We’re expecting airlines to deliver a global profit of $36.6 billion in 2025. This will be hardearned as airlines take advantage of lower oil prices while keeping load factors above 83 per cent, tightly controlling costs, investing in decarbonisation, and managing the return to more normal growth levels following the extraordinary pandemic recovery. All these efforts will help to mitigate several drags on profitability which are outside of airlines’ control, namely persistent supply chain challenges, infrastructure deficiencies, onerous regulation, and a rising tax burden,” said Willie Walsh, IATA’s Director General.

“In 2025, industry revenues will exceed $1 trillion for the first time. It’s also important to put that into perspective. A trillion dollars is a lot—almost 1 per cent of the global economy. That makes airlines a strategically important industry. But remember that airlines carry $940 billion in costs, not to mention interest and taxes. They retain a net profit margin of just 3.6 per cent. Put another way, the buffer between profit and loss, even in the good year that we are expecting of 2025, is just $7 per passenger. With margins that thin, airlines must continue to watch every cost and insist on similar efficiency across the supply chain—especially from our monopoly infrastructure suppliers who all too often let us down on performance and efficiency,” said Walsh.

IATA highlighted the broad benefits of growing connectivity. The most recent estimates show that airline employment is expected to grow to 3.3 million in 2025. 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 per cent of global GDP (2023 figures). Connectivity is an economic catalyst for growth in nearly all industries.

Looking at 2025, for the first time, traveler numbers will exceed five billion and the number of flights will reach 40 million. This growth means that aviation connectivity will be creating and supporting jobs across the global economy. The most obvious are the hospitality and retail sectors which will gear up to meet the needs of a growing number of customers. But almost every business benefits from the connectivity that air transport provides, making it easier to meet customers, receive supplies, or transport products.

The capacity challenges of 2024 will continue into 2025 and indeed through to 2026 as airlines struggle with the fallout from MRO (Maintenance, Repair, and Overhaul) issues and production delays from major aircraft manufacturers. Expect capacity to grow by between 3-4 per cent during the year and any more will be a pleasant surprise.

New technology and the expansion of long-range single-aisle aircraft will lead to a series of new routes being launched to smaller market pairs. Likely regions for development are the North Atlantic, South and Central Asia which should lead to exciting announcements later in 2025.

Airports and airlines will increasingly use AI in their operations as they seek to drive further efficiency and reduce cost. easyJet are trialling remote contact pier (air bridge) connectivity at London Gatwick, which potentially could save time, resources and shorten turnaround times.