Global airline association IATA has slightly upgraded its industry net profit forecast for 2024, while predicting a strengthening of profitability in 2025, driven in large part by expectations that fuel costs will be lower.

Outlining its latest forecasts on 10 December, IATA says it now expects a global net profit of $31.5 billion in 2024 – up from the $30.5 billion forecast in June – and $36.6 billion in 2025. Those translate into margins of 3.3% and 3.6% respectively – levels that IATA continues to describe as “thin”.

The 2023 net profit came in at $35.2 billion.

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All regions are expected to be profitable this year and next, although there is some variation in margins

The forecast net profits per passenger of $6.4 billion in 2024 and $7.0 billion in 2025 compare with $7.9 billion in 2023.

Reflecting on the outlook for 2025, IATA director general Willie Walsh states: “This will be hard-earned as airlines take advantage of lower oil prices while keeping load factors above 83%, 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.”

All regions are forecast to achieve aggregate net profits in 2024 and 2025, although there is significant variation in their margins. African carriers are expected to achieve a margin of below 1% in both cases, for example, whereas Middle Eastern carriers are forecast to achieve 7.7% and 8.2%, respectively. The other regions sit somewhere in between.

Notably, global airline revenues are expected to increase by 4.4% in 2025 to exceed $1 trillion for the first time, while global passenger numbers are expected to exceed 5 billion for the first time, at 5.2 billion.

IATA also expects capacity constraints will mean that growing demand exceeds supply expansion in 2025, pushing up load factors.

Among the risks to airline profitability, IATA cites conflicts around the world, uncertainties about the policies of the incoming Trump administration, and oil prices.

“Lower oil prices and resulting fuel costs are a major driver of improved prospects for airlines in 2025,” IATA  states. “Should these not materialise for any reason and considering the industry’s thin margins, the outlook could change significantly.”

Corrected to reflect IATA’s revised 2023 profit figure

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