Mideast airlines to generate highest net profit

The global airline industry is showing improved profitability this year over 2024 and is resilient in the face of global economic and political shifts, the International Air Transport Association (IATA) updates said.
The Middle East will generate the highest net profit per passenger among the regions. Robust economic performance is supporting strong air travel demand, both for business and leisure travel. However, with delays in aircraft delivery, the region will see limitations in capacity as airlines embark on retrofit projects to modernise their fleet, hence limiting growth, said IATA.
Highlights from the expected 2025 financial performance include:
* Net profits at $36 billion, is  set to improve from the $32.4 billion earned in 2024, but slightly down on the previously projected $36.6 billion (December 2024).
• Net profit margin at 3.7% will improve from the 3.4% earned in 2024 and the previously projected 3.6%.
• Return on invested capital at 6.7%, improved from the 6.6% earned in 2024 and largely unchanged from previous projections.
• Operating profits at $66.0 billion, improved from an estimated $61.9 billion in 2024, but down from the previously projected $67.5 billion.
• Total revenues at a record high of $979 billion (+1.3% on 2024, but below the $1 trillion previously projected).
• Total expenses at $913 billion (+1.0% on 2024, but below the previously projected $940 billion).
• Total traveller numbers reaching a record high 4.99 billion (+4% on 2024, but below the previously projected 5.22 billion).
• Total air cargo volumes reaching 69 million tonnes (+0.6% on 2024, but below the previously projected 72.5 million tonnes).
“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. 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. 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,” said Willie Walsh, IATA’s Director General.
Perspective
“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.
Outlook Drivers
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.
Efficiency is another significant driver of the outlook. 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.
Overall, total revenues are expected to grow by 1.3%, outpacing a 1.0% increase in total expenses, shoring up industry profitability.
Industry revenues are expected to reach a historic high of $979 billion in 2025 (+1.3% on 2024).
Passenger Revenues
Passenger revenues are expected to reach $693 billion in 2025 (+1.6% on 2024), an all-time high. This will be bolstered by an additional $144 billion in ancillary revenues (+6.7% on 2024).
Passenger growth (measured in Revenue Passenger Kilometers/RPK) is expected to be 5.8%—a significant normalization after the exceptional double-digit growth of the pandemic recovery.
It is expected that passenger yields will fall by 4.0% compared with 2024. This is largely reflective of the impact of lower oil prices and strong industry competition. This will continue the trend of travelers benefiting from ever-more affordable air travel. The real average return airfare (in 2024 US dollars) is expected to be $374 in 2025. This is 40% below 2014 levels.
IATA’s April 2025 polling data supports projections for demand growth:
• Some 40% of respondents expect to travel more over the next 12 months than they did in the previous 12-month period. The majority (53%) said that they expect to travel as much as they did in the previous 12 months. Only 6% reported that they expect to travel less.
• Some 47% of respondents expect to spend more on travel over the next 12 months than they did in the previous 12 months. An almost equal proportion (45%) expect to spend the same on travel over the next 12 months while only 8% expect to spend less.
• Although 85% expected trade tensions to impact the economy in which they reside and 73% expect to be personally impacted, 68% of business travelers (50% of those polled) expected increased business travel amid trade tensions to visit customers, and 65% said trade tensions would have no impact on their travel habits.
Cargo Revenues
Cargo revenues are expected to be $142 billion in 2025 (-4.7% on 2024). This is primarily based on the expected impact of reduced GDP growth largely influenced by trade-dampening protectionist measures, including tariffs. As a result, air cargo growth is expected to slow to 0.7% in 2025 (from 11.3% in 2024). The cargo yield is also expected to reduce by 5.2%, reflecting a combination of slower demand growth and lower oil prices.
Although significant uncertainty remains on how trade tensions will evolve over the year, as of April cargo demand was holding up well with a 5.8% year-on-year increase.