The global air transport industry is heading into 2025 with a renewed sense of optimism. Today, it raised its full-year net profit forecast by nearly 10% to a record-breaking $39.5 billion. On top of that, we are expecting to see more than 5 billion passengers taken to the skies for the first time in history.
The International Air Transport Association (IATA), which speaks for 360 carriers and roughly 80% of global air traffic, shared this upgraded outlook from its headquarters in Geneva. It represents a sharp improvement from the $36 billion forecast they released just six months ago.
Willie Walsh, the IATA Director General, noted that despite the continuing headwinds, the industry has shown incredible resilience. He made a point to single out air cargo for praise, describing its performance as particularly impressive even as trade tensions escalate and protectionist policies shift in the U.S.
Cargo Boom and Trillion-dollar Revenues
Air freight has actually been the surprise standout of 2025. IATA now expects airlines to generate total revenues of $1.008 trillion next year. That marks the first time the industry will cross that symbolic trillion-dollar threshold, and it is expected to climb even further to $1.053 trillion in 2026.
This stronger outlook is driven largely by cargo, with freight volumes forecast to reach 71.6 million tonnes in 2026, a 2.4% increase. Walsh observed that global trade is adapting to American protectionism faster than many people expected.
Passenger numbers are also set to hit new highs. After a few revisions, IATA now predicts the industry will carry 5.2 billion passengers in 2025, a 4.4% jump. This finally surpasses the long-awaited 5 billion mark that was originally forecasted for 2024 before Covid delays pushed everything back. The pre-pandemic record of 4.54 billion set in 2019 was already eclipsed in 2024, and it will be left far behind next year.
Falling Fuel Costs, Rising Engine Frustration
Lower oil prices are helping to improve margins. Fuel is projected to drop from 31.8% of operating costs in 2023 to just 25.7% in 2026. Meanwhile, a relatively weak U.S. dollar is providing an extra boost for non U.S. carriers.
Net profit margins are expected to stabilize at 3.9% in both 2025 and 2026. That is well below the 2017 peak of 5%, but it is still a remarkable recovery from the catastrophic losses faced during the pandemic years.
Walsh used the press conference to renew his fierce criticism of aircraft and engine manufacturers. He accused them of earning extraordinary margins while chronically failing to meet delivery commitments. IATA confirmed it is actively exploring legal avenues to obtain compensation for its members.
Stark Regional Differences Remain
Profitability continues to vary dramatically by region in the latest 2026 forecast:
- Middle East carriers: $28.60 net profit per passenger
- Europe: $10.90
- North America: $9.80
- Asia Pacific: $3.20
- Africa: $1.30
Passenger growth will be just as uneven, with Asia Pacific leading at +7.3%, followed by Europe at +3.8%, and a comparatively modest +1.5% in North America.
With COVID-19 now firmly in the rearview mirror and multiple records within reach, the air transport industry appears to have entered a new phase of cautious but sustained expansion. That holds true provided supply chain bottlenecks and geopolitical risks do not derail the recovery.
