Aviation industry expects higher profits in 2025 riding on higher demand

Total revenue expected to cross US$1 trillion for the first time

The global aviation industry is expected to see higher profit and net margin in 2025 compared to the previous year despite challenges in cost and supply chain issues, according to the International Air Transport Association (IATA).

The IATA forecast that the industry would generate a profit of US$36.6 billion in 2025, with a net margin of 3.6%, a slight improvement over the previously forecast net profit of $31.5 billion for 2024, with a net margin of 3.3%.

The average net profit per passenger is expected to be $7, slightly down from the peak of $7.9 in 2023 but higher than $6.4 in 2024.

"The total revenue for the industry in 2025 is expected to reach US$1.007 trillion, a 4.4% increase from 2024, marking the first time the industry’s revenue would exceed $1 trillion. The number of passengers is expected to reach 5.2 billion, up 6.7%, marking the first time passenger numbers would exceed 5 billion. The volume of cargo is projected to reach 72.5 million tons, up 5.8% from 2024," IATA revealed.

The IATA estimates that the Asia-Pacific market will remain the largest in terms of passenger traffic, with China accounting for over 40% of the volume. This represents an 18.6% growth, partly driven by market stimulation from relaxed visa requirements in several countries, including China, Vietnam, Malaysia and Thailand.However, the industry faces key risks in 2025. The report highlights that heightened geopolitical and economic uncertainties pose the most significant threats to the outlook for aviation. Escalating conflicts in Europe and the Middle East could further disrupt the industry, while the potential for peace—especially in the case of the Russia-Ukraine war—could have a positive impact.

"The report notes that the potential return of a Trump administration introduces multiple uncertainties. Trade tariffs and economic disputes could dampen demand for air cargo and business travel. If these policies trigger inflation and lead to higher interest rates, it could negatively impact air travel demand," the IATA said. 

"It also remains unclear whether the US government will continue efforts to reduce carbon emissions in the aviation sector. If these initiatives proceed, the net-zero carbon goal will stay on track. However, if regulations are rolled back, business operations in aviation may become easier due to the removal of certain restrictions."

Another key risk factor is fuel prices. While oil and fuel costs are expected to decline in 2025—a positive trend for the aviation industry—any unexpected price surge could still impact airline operations.The director-general of the Civil Aviation Authority of Thailand (CAAT), Suttipong Kongpool, reported that in 2024, total passenger volume reached 140 million, marking a 15.12% increase from the previous year and an 85.14% recovery compared to pre-pandemic levels. The total number of flights rose by 11.90% year on year to 880,000. Air cargo volume exceeded pre-pandemic levels by 101.63% compared to 2019 and increased by 22.4% from 2023. This indicates that by 2025, the aviation industry is on track to fully recover and return to 2019 levels of growth.

Currently, Thailand ranks as the world’s 19th-largest aviation market. According to IATA, Thailand's aviation industry is projected to become the ninth largest globally by 2033, highlighting its growing role as a key regional and international aviation hub. To support this growth, aviation authorities must enhance service capabilities, maintain international safety standards, and accelerate the implementation of critical infrastructure projects.

Regarding efforts to address airfare prices, the introduction of special additional flights during the 2025 New Year holiday—offering over 70,000 extra seats—helped reduce ticket prices compared to the previous year. For the upcoming Songkran festival, the CAAT said it was working closely with airlines and service providers to implement measures ensuring sufficient travel options and fair ticket pricing for the public.

(2025/01/31-00:00)