The global airline industry is expected to achieve record profits and passenger numbers in 2025 despite ongoing supply chain disruptions, according to the International Air Transport Association (IATA), boosting airline stocks during Tuesday's session.
Revenues are projected to surpass $1 trillion for the first time, IATA said, driven by both passenger and cargo growth.
Shares of Alaska Air Group (NYSE:ALK) surged 13.4%, American Airlines Group Inc (NASDAQ:AAL, ETR:A1G) traded 3% higher, Delta Air Lines Inc (NYSE:DAL) and United Airlines Holdings Inc (NASDAQ:UAL, ETR:UAL1) both added 1.6%, JetBlue Airways (NASDAQ:JBLU) added 0.7% and Toronto-listed Air Canada (TSX:AC.B) gained 1.7%
IATA forecasts a 2025 global profit for the airline industry of $36.6 billion, a 3.6% margin, marking an increase from the $31.5 billion expected in 2024.
Passengers are expected to grow 6.7% year-over-year to $5.2 billion, resulting in net profit per passenger of $7, below 2023’s $7.90 high but an improvement from $6.40 this year.
Passenger revenues are expected to reach $705 billion, while air cargo revenues are set to increase by 6%, reaching $157 billion.
Expenses are forecast to grow 4% to $940 billion.
Meanwhile, the number of flights is set to reach 40 million as airline employment is expected to grow to 3.3 million.
“We’re expecting airlines to deliver a global profit of $36.6 billion in 2025. This will be hard-earned as airlines take advantage of lower oil prices while keeping load factors above 83%, tightly controlling costs, investing in decarbonization, and managing the return to more normal growth levels following the extraordinary pandemic recovery,” IATA director general Willie Walsh said in a statement.
“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.”