Global Aviation Industry's Net Profit To Improve To $36.6 Billion In 2025 On Cheaper Oil: IATA

The global aviation industry's net profit is expected to improve to $36.6 billion in calendar year 2025, in the backdrop of cheaper oil prices and cost control, according to International Air Transport Association.

This would mark a jump of 16% as compared to IATA's estimated net profit of $31.5 billion for the global airline industry in 2024.

The average net profit per passenger is expected to be $7, which will mark an improvement from $6.4 in 2024, IATA said in its financial outlook for 2025. However, this will be lower as compared to the high of $7.9 in 2023.

The jump in industry-wide bottom line will be "hard earned" as airlines take advantage of lower oil prices while keeping load factors above 83%, IATA Director General Willie Walsh said in a press briefing. The carriers will also be tightly controlling costs, investing in decarbonisation, and managing the return to more normal growth levels following the extraordinary pandemic recovery, he added.

Oil prices have slumped in recent period, with the futures of Brent, the global crude benchmark, hovering around $70 per barrel.

In 2025, jet fuel price is expected to average $87 per barrel compared to $99 per barrel in 2024, IATA said in its outlook. This is based on a jet fuel crack spread of $12 per barrel and a crude oil price of $75 per barrel, it added.

"Airlines' cumulative fuel spend is expected to be $248 billion, a decline of 4.8 per cent despite a 6 per cent rise in the amount of fuel expected to be consumed (107 billion gallons). Fuel is expected to account for 26.4 per cent of operating costs in 2025, down from 28.9 per cent in 2024," IATA said.

At the same time, Walsh said there are supply chain challenges, infrastructure deficiencies, onerous regulations and a rising tax burden.

IATA also mentioned that net profitability will be squeezed as airlines are expected to exhaust their tax losses carry forwards from the pandemic era, leading to an increase in tax rates in 2025.

(With PTI inputs)