African airlines are expected to double their profit to $200 million in 2025, a year in which the global airline industry’s revenues are projected to cross the $1 trillion mark for the first time since the systematic compilation of performance statistics started.

Collectively, the world’s airlines are expected earn a $36.6 billion net profit on the back of strong growth in travel demand and moderate fuel prices.

Although it will be coming off an eight percent increase in passenger demand and a 7.7 percent growth in capacity, Africa’s performance will be constrained by the enduring legacy of high operational costs, mainly driven by high taxes and charges on air transport, a weak economic environment and foreign currency scarcity in many markets.

According to the International Air Transport Association’s (Iata) global airline industry financial outlook for 2025, airlines are expected to gross revenues of $1.007 trillion, with expenses projected at $940 billion, a 4.4 percent increase over 2024.

The year’s profit margin will be 3.6 percent, a marginal improvement on the 3.3 percent for 2024.

According to Iata director-general Willie Walsh, the improved prospects are a reflection of diligent cost management and moderate fuel prices.“We’re expecting airlines to deliver a global profit of $36.6 billion in 2025. This will be hard-earned as airlines take advantage of lower oil prices while keeping load factors above 83 percent, tightly controlling costs, investing in decarbonisation, and managing the return to more normal growth levels following the extraordinary pandemic recovery. All these efforts will help to mitigate several drags on profitability which are outside of airlines’ control, namely persistent supply chain challenges, infrastructure deficiencies, onerous regulation, and a rising tax burden,” he said.

IATAHe added that the projected $1 trillion revenues are indicative of both the strategic importance of the airline industry to the global economy as well as its vulnerability to shifts in the major cost drivers.“A trillion dollars is a lot — almost one percent of the global economy. That makes airlines a strategically important industry. But remember that airlines carry $940 billion in costs, not to mention interest and taxes. They retain a net profit margin of just 3.6 percent. Put another way, the buffer between profit and loss, even in the good year that we are expecting of 2025, is just $7 per passenger.

With margins that thin, airlines must continue to watch every cost and insist on similar efficiency across the supply chain—especially from our monopoly infrastructure suppliers who all too often let us down on performance and efficiency,” he said.

While the global average net profit per passenger for 2025 is expected to be $7, African airlines will earn a profit of $1 per passenger, an improvement of 11.1 percent over 2024.

Passenger numbers, which are expected to grow 6.7 percent to 5.2 billion in 2025, will contribute nearly three quarters of industry revenues ($705 billion), while cargo volumes are expected to reach 72.5 million tonnes, up 5.8 percent on 2024.

Airlines will earn an additional $145 billion (14.4 percent of total revenues) from ancillary services in 2025.

Despite the record revenues, a 3.4 percent fall in passenger yields means that in real terms, air travel will be more affordable with the average airfare, including ancillaries, expected to be $380 in 2025. That represents a 44 percent drop, compared to 2014, indicating that passengers are getting an ever-bigger share of the efficiency gains by the industry.

Iata further estimates that airline employment will grow to 3.3 million direct jobs in 2025. In 2023, estimates put employment in the global aviation value chain at 86.5 million people and $4.1 trillion in economic impact, accounting for 3.9 percent of global GDP.

“Looking at 2025, for the first time, traveller numbers will exceed five billion and the number of flights will reach 40 million. This growth means that aviation connectivity will be creating and supporting jobs across the global economy. On top of this, growth in aviation also contributes to achieving almost all the UN’s Sustainable Development Goals,” Walsh said.

While lower prices for jet fuel, projected to average $87/barrel (down from $99/barrel in 2024) and efficiency gains are expected to have a positive impact on the industry’s overall financial performance, further improvements will be constrained by persistent supply chain issues which will limit capacity growth while driving up aircraft leasing rates and maintenance costs.

Net profitability will further be hemmed-in by an increase in tax rates as the pandemic related tax losses carry forwards that airlines have been enjoying tail-off during the year.

Revenue passenger kilometres, the industry’s standard measure of demand, are expected to grow by eight percent in 2025, on a 7.1 percent expansion of capacity. Aircraft departures are forecast to reach 40 million, an increase of 4.6 percent from 2024, and the average passenger load factor is anticipated at 83.4 percent, up 0.4 percentage points from 2024.

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