International air travel is expected to top 5 billion for the first time next year

Despite ongoing supply chain challenges and cost issues, international air passenger traffic is expected to cross the 5 billion mark for the first time in 2025, reaching 5.2 billion passengers, an increase of 6.7% over 2024. Global aviation revenues are expected to reach $1.007 trillion next year, a record high.

Willie Walsh, Director General of the International Air Transport Association (IATA), hosted IATA's Global Media Day on Tuesday (Geneva time) to share the outlook for the aviation industry in the coming year.

IATA forecasts that the global airline industry will make a net profit of $36.6 billion next year, with a net margin of 3.6 percent. This is a slight improvement from the expected net profit of 31.5 billion yuan (3.3 percent net margin) in 2024. Operating profit next year is expected to be 67.5 billion yuan, with a net operating margin of 6.7 percent, up from an estimated 6.4 percent this year.

Total revenue is expected to top $1 trillion next year, almost 1 percent of the global economy, due to lower oil and fuel prices, but Walsh cautioned that airlines cost as much as $940 billion, not including interest and taxes, leaving a net profit margin of just 3.6 percent. "In other words, even in the good year we expect 2025, the buffer between profit and loss per passenger is only $7." With such thin margins, airlines must continue to focus on every cost and insist on similar efficiencies across the supply chain, especially with monopoly infrastructure suppliers whose performance and efficiency often let us down."

revenue passenger kilometre (RPK) in the Asia-Pacific region rose 18.6 per cent this year, higher than the expected 17.1 per cent, in part due to the relaxation of entry visa requirements in countries such as China, Vietnam, Malaysia and Thailand, stimulating the market. RPK is a concept used to measure passenger traffic and is equal to the number of passengers who paid for tickets for each flight multiplied by the number of miles flown.