Willie Walsh, Director General, IATA
Airlines would resist any attempt by planemakers or other suppliers to raise their prices due to tariffs, but that there were no signs of plane prices being pushed higher so far,IATA Director General Willie Walsh
The airline industry is evaluating legal options over aircraft delivery delays that have hampered growth, but prefers to work with manufacturers collaboratively, the head of the International Air Transport Association said on Monday.
IATA Director General Willie Walsh also told reporters that airlines would resist any attempt by planemakers or other suppliers to raise their prices due to tariffs, but that there were no signs of plane prices being pushed higher so far.
The first half of 2025 has brought significant uncertainties to global 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, he said.
“The biggest positive driver is the price of jet fuel which has fallen 13% compared with 2024 and 1% below previous estimates. Moreover, 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,” he said.
The result is an improvement of net margins from 3.4% in 2024 to 3.7% in 2025. 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, added Walsh.
Perspective is critical to put into context such large industry-wide aggregate figures. Earning a $36 billion profit is significant. But that equates to just $7.20 per passenger per segment. 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. Policymakers who rely on airlines as the core of a value chain that employs 86.5 million people and supports 3.9% of global economic activity, must keep this clearly in focus,” said Walsh.
Gross Domestic Product (GDP) is the traditional driver of airline economics.
However, although global GDP growth is expected to fall from 3.3% in 2024 to 2.5% in 2025, airline profitability is expected to improve. This is largely on the back of falling oil prices. Meanwhile, continued strong employment and moderating inflation projections are expected to keep demand growing, even if not as fast as previously projected.
Passenger load factors are expected to reach an all-time high in 2025 with a full-year average of 84.0%, as fleet expansion and modernization remains challenging amid supply chain failures in the aerospace sector.
With inputs from Agencies