Air passengers to top 5B in 2025 despite supply chain issues: IATA

Air passenger numbers are forecast to top 5 billion for the first time next year and the sector's revenues are estimated to break the trillion-dollar barrier, a top global aviation body said Tuesday despite also warning of "unacceptable" difficulties in securing new planes.

"Passenger numbers are expected to reach 5.2 billion in 2025, a 6.7% rise compared to 2024 and the first time that the number of passengers has exceeded the five billion mark," the International Air Transport Association (IATA) said in a statement.

Total industry revenues are meanwhile forecast at $1.007 trillion, helped by falling oil and fuel prices, "the first time that industry revenues top the $1 trillion mark," it added.

Revenues will be up 4.4% from 2024, it said.

"All of this gives us a financial performance which I think is absolutely worth popping the champagne" after a post-pandemic bounce-back, IATA chief economist Marie Owens Thomsen told a news conference in Geneva.

IATA's Director General Willie Walsh said in the statement that IATA expected profits of $36.6 billion despite "persistent supply chain challenges, infrastructure deficiencies, onerous regulation and a rising tax burden."

Airlines around the world have seen their growth hampered by problems at Boeing and Airbus, which have delayed jet deliveries. Without newer, more efficient planes, airlines say they cannot reduce fuel costs while flying more people.

"We've given them time. I think our patience has run out. The situation is unacceptable, Walsh told reporters.

He said suppliers acted like "quasi-monopolies" and appeared to be benefiting from the problems they had caused.

"We're going to have to ramp up the pressure and maybe look for support to force key suppliers to get their act together," said Walsh, who was previously head of British Airways and its parent company, IAG.

Despite the problems, IATA expected the industry to generate $36.6 billion in net profit in 2025, up from $31.5 billion in expected net profit in 2024, with a record 5.2 billion passengers set to fly.

That comes four years after the industry collapsed to a $140 billion loss in 2020 as a result of the COVID-19 pandemic, but it has recovered thanks to robust travel demand.

Jet fuel prices are also set to fall, offering some relief.

Optimism on Trump 2.0

Walsh was upbeat about the second term of U.S. President-elect Donald Trump, saying that his actions in his first term had boosted the sector.

"The indication is that the second Trump administration is likely to reverse some of the actions that were taken under the (Joe) Biden administration," he said.

"I would see the Trump administration as being a net positive for the industry," he added.

However, uncertainty tied to conflicts in the Middle East and Ukraine could pose risks to the sector's health, said IATA, which expects 2025 passenger yields, the average amount paid by a passenger to fly 1 mile, to fall by 3.4% versus 2024.

IATA represents around 340 companies that account for 80% of world air traffic.

Airlines have been hit by rising fuel costs since Russia invaded Ukraine in 2022, but IATA said it expected this factor to ease next year, with the cost of jet fuel averaging $87 a barrel, down from $99 in 2024.

"Lower oil prices and resulting fuel costs are a major driver of improved prospects for airlines in 2025," it said.

"Should these not materialize for any reason and considering the industry's thin margins, the outlook could change significantly," it warned.