Core Viewpoint - The International Air Transport Association (IATA) has adjusted its financial outlook for airlines in 2025, projecting improved profitability compared to 2024, despite a complex global economic and political environment [1][2]. Financial Projections - The airline industry is expected to achieve a net profit of $36 billion in 2025, up from $32.4 billion in 2024, with a net profit margin increasing to 3.7% from 3.4% [1][2]. - Operating profit is projected to reach $66 billion, exceeding the $61.9 billion forecast for 2024, while total revenue is anticipated to hit a record high of $979 billion, with passenger numbers reaching 4.99 billion [1][3]. - The return on invested capital is expected to rise to 6.7% from 6.6% in 2024 [1]. Revenue Drivers - Global airline revenue is projected to grow by 1.3% in 2025, reaching $979 billion, with passenger revenue expected to rise to $693 billion, a 1.6% increase [3]. - Ancillary revenue is forecasted to grow by 6.7% to $144 billion, while cargo revenue is expected to decline by 4.7% to $142 billion due to slowing GDP growth and trade protectionism [3]. Cost Structure - Total industry expenditure is expected to increase to $913 billion in 2025, a 1.0% rise, with fuel costs significantly reduced due to lower oil prices [4]. - The average fuel price is projected to be $86 per barrel, down from $99 in 2024, although sustainable aviation fuel (SAF) costs are expected to be 4.2 times higher than jet fuel [4]. - The industry faces challenges with a backlog of over 17,000 aircraft and supply chain issues, leading to increased leasing costs and an aging fleet [4]. Regional Performance - North America is projected to achieve the highest industry profit, with a net profit of $12.7 billion in 2025, despite economic slowdowns [5]. - European airlines are expected to benefit from increased passenger demand, with a projected net profit of $11.3 billion [6]. - The Asia-Pacific region, led by China, is anticipated to see a net profit of $4.9 billion, driven by strong travel demand despite economic challenges [7]. - Latin America is the only region expected to see a decline in profitability, with a projected net profit of $1.1 billion [8]. - Middle Eastern airlines are forecasted to achieve a net profit of $6.2 billion, supported by strong demand [9]. - African airlines are expected to maintain a net profit of $200 million, facing high operational costs and supply shortages [10][11].