Total 2025 airline industry revenue for the first time should exceed $1 trillion, representing a 4.4 percent increase year over year, according to an International Air Transport Association outlook released Tuesday. The association projects airline expenses to grow by 4 percent to $940 billion.

IATA also projects 2025 passenger revenue to reach $705 billion, with an additional $145 billion generated by ancillary services. Still, passenger yield is expected to fall 3.4 percent year over year, while unit revenue is expected to fall 2.5 percent.

“A trillion dollars is a lot—almost 1 percent of the global economy,” IATA director general Willie Walsh said in a statement. “But remember that airlines carry $940 billion in costs, not to mention interest and taxes.” 

IATA also projects a “slight strengthening” for airline profitability, with ongoing cost and supply-chain challenges remaining headwinds. The group forecast net airline profits in 2025 to reach $36.6 billion, up from the projected $31.5 billion for 2024. Average net profit per passenger is estimated to be $7, which is below the high of $7.90 in 2023, but up from the $6.40 projected for 2024.

The association projects 2025 airline operating profit of $67.5 billion for a net operating margin of 6.7 percent, up from the 6.4 percent estimated for 2024.

IATA projects average 2025 airfare, including ancillaries, of $380, 1.8 percent lower than in 2024. IATA estimates that when adjusted for inflation, that represents a 44 percent drop compared with 2014 fares, “indicating that significant value is being passed to consumers in the industry’s continued effort to improve efficiency.”

Passenger demand is projected to grow 8 percent year over year, ahead of a 7.1 percent expected increase in capacity for 2025, according to IATA. The group projects passenger numbers in 2025 to reach 5.2 billion, a 6.7 percent increase year over year and the first time that the number of passengers would exceed 5 billion.

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