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Global Airlines Expect Largest Number of Passengers in History by 2025

The worldwide airline sector is projected to achieve a net income of $36.6 billion by 2025, fueled by a historic number of 5.2 billion travelers taking flight, according to the industry’s leading advocacy group in their annual forecast.

This forecast shows a 16% increase compared to the 2024 figures. The profit margins in the industry are expected to reach 3.6%, an improvement from the 3.3% margins anticipated in 2024, as reported by the International Air Transport Association (IATA) on Wednesday. The boost in profitability is attributed to lower oil prices and increased demand, although anticipated tariffs and trade disputes from the incoming Trump administration could negatively impact the sector’s outlook, the organization noted.

IATA also predicts that industry revenues will surpass $1 trillion for the first time in 2025.

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Despite a strong rebound in demand following the pandemic, the aviation sector continues to experience slim profit margins. Airlines are facing challenges due to supply chain disruptions, resulting in delays for the delivery of new, more fuel-efficient aircraft, and longer maintenance periods for existing planes.

In 2024, North America remained the largest contributor to global industry profits, although margins were lower compared to pre-pandemic levels due to slow aircraft deliveries and rising costs, particularly among low-cost carriers, according to IATA. The Middle East exhibited the strongest financial performance and was the only region to see an increase in passenger yields, driven by robust demand for premium long-haul travel.

IATA cautioned that their outlook could change if the conflicts in Ukraine and the Middle East escalate or if oil prices do not decline as expected.

© 2024 Bloomberg

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