Global airlines body Iata cuts traffic and profit forecasts for 2025 amid trade turbulence

New Delhi – Global airlines on June 2 revised down their traffic and profit forecasts for 2025, citing “headwinds” for the global economy.

The International Air Transport Association (Iata) estimates fewer than five billion air journeys will take place this year, compared with the previously forecast 5.22 billion.

“The first half of 2025 has brought significant uncertainties to global markets,” Mr Willie Walsh, Iata’s director-general, told its annual general meeting in New Delhi, India.

At the same time, the industry is benefiting from lower oil prices, which are in turn trimming airlines’ fuel bills – the biggest single expense for carriers. 

Mr Walsh added: “Considering the headwinds, it’s a strong result that demonstrates the resilience that airlines have worked hard to fortify.”

Cumulative airline profits will reach US$36 billion (S$46.5 billion) in 2025, US$600 million less than expected, IATA said.

Commercial aviation revenues are expected to remain below the US$1 trillion forecast in the previous December projections, with IATA now reporting US$979 billion.

Mr Walsh, addressing Iata delegates, called for the aviation sector to be spared from increased tariffs – though he did not name US President Donald Trump, who launched a trade war in early April.

In 2024, the industry earned a collective US$32.4 billion on a margin of 3.4 per cent.

Mr Walsh said profitability remains “wafer thin”: “Any new tax, increase in airport or navigation charge, demand shock or costly regulation will quickly put the industry’s resilience to the test.

“Policymakers who rely on airlines as the core of a value chain that employs 86.5 million people and supports 3.9 per cent of global economic activity, must keep this clearly in focus.”

The organisation also expects 69 million tonnes of cargo to be transported by air in 2025, down from the 72.5 million previously expected.

Airlines – particularly in the United States – have been forced to scale back their outlooks in recent weeks after price-sensitive passengers reconsidered their travel plans and some high-profile accidents discouraged bookings.

In March, Delta Air Lines slashed its first-quarter profit guidance and also reduced its outlook for revenue growth and operating margin. That was a sharp reversal from the start of2025, when it saw a steady demand environment.

Mr Walsh said in an interview with Bloomberg Television that he remains optimistic, considering some of the events restraining growth are “short-term in nature”.

“It won’t have a long term impact on the growth in the industry,” Mr Walsh said. “Demand for aviation, demand for flying, will remain strong.” AFP, BLOOMBERG