« Champagne » for airlines? Far from the dark years of Covid-19, the sector expects a record number of passengers and sharply increased profitability next year thanks to the decline in oil prices.
For the International Air Transport Association (Iata), 2025 promises to be “a happy new year”: it will be “the first time that the number of passengers exceeds five billion”or 5.2, after the approximately 4.9 expected in 2024 which should already make it possible to erase the record of 4.5 billion established in 2019, before the global health crisis.
In addition, the companies are expected to generate a cumulative net profit of $36.6 billion, an increase of 16.1% compared to expected profits in 2024, and synonymous with a net margin of 3.6%.
The turnover of carriers should reach 1,007 billion dollars, an increase of 4.4% over one year, while costs will only increase by 4% to 940 billion, Iata also estimated during of a press conference at its headquarters in Geneva (Switzerland).
So many numbers that “deserve to pop a champagne cork”launched Iata’s chief economist, Marie Owens Thomsen, welcoming the spectacular turnaround of a sector which had sunk into abysmal losses during the Covid pandemic, estimated by Iata at 183 billion dollars accumulated between 2020 and 2022.
Iata, which claims some 340 member companies representing 80% of global air traffic, warned that this growth would remain constrained by “supply chain problems, deficient infrastructure (…) and an increase in tax pressure”.
The director general of Iata, Willie Walsh, particularly attacked manufacturers on Tuesday, whether aircraft manufacturers like Boeing and Airbus, but also engine manufacturers (GE, Rolls-Royce, Pratt & Whitney), for their inability “unacceptable” to fulfill their orders on time.
Grounded planes
This situation, which is likely to persist according to the head of Iata, prevents companies from renewing their fleets at the planned pace and forces them to continue to operate older and less efficient aircraft, also to the detriment of their decarbonization efforts.
Another aspect, reactors which require repairs sooner than expected. Thus, according to Iata, no less than 700 aircraft, or 2% of the world fleet, “are currently grounded for inspections of their engines”.
Improved, however, on the cost side: after suffering from high oil prices since Russia’s invasion of Ukraine in February 2022, airlines hope to take advantage of their downturn next year to reduce their bills.
In 2025, a barrel of kerosene should cost an average of $87, after $99 in 2024. As a result, fuel will only represent 26.4% of companies’ operating costs, compared to 28.9% in 2024, forecasts the Iata.
In absolute value, company spending on fuel should stand at $248 billion, down 4.8%, despite a 6% increase in consumption, according to the association.
Even in a ” Have a good year “ like the one that seems to be looming, companies only make a profit of seven dollars per passenger on average, and must continue to control their costs, warned Mr. Walsh.
Especially since revenue from tickets and associated services (baggage, food, etc.) is expected to decline by 3.4% over one year in 2025.
“The price of the average ticket should reach 380 dollars, 1.8% less than in 2024, according to Iata which ensures that taking into account inflation, tickets will cost 44% less than ten years earlier .
Iata also highlighted uncertainties due to conflicts in Ukraine and the Middle East and the return of Donald Trump to power in the United States.
An increase in customs barriers promised by the president-elect “would likely reduce air cargo activity and business travel”but the association also noted “business-friendly attitude” and Mr. Trump’s deregulation during his first term, a source of optimism for her.