Global airlines industry is expected to record increased revenue and profit in 2025 but the financial results will be hard earned as the supply chain has been disrupted by aircraft delivery backlog, reported the national news agency Bernama quoting the International Air Transport Association (IATA).

According to IATA, all the world regions are expected to show improvement of financial performance and deliver a net profit in 2025. Overall, global passenger traffic in 2025 is expected to exceed the five billion mark for the first time, rising 6.2% to 5.2 billion.

Total industry revenue is expected to reach US$1.01 trillion (RM4.46 trillion), an increase of 4.4% from 2024, surpassing the US$1 trillion-mark for the first time. Airlines profitability in 2025 is expected to strengthen, resulting in total net profit of US$36.6 billion (RM161.8 billion) which reflects a 3.6% net profit margin. Total operating profit is expected to reach US$67.5 billion (RM298.35 billion) which represents a net operating margin of 6.7%, up from 6.4% projected for 2024.

Meanwhile, return on invested capital (ROIC) for the global airlines industry is expected to be 6.8% in 2025 compared to 6.6% last year.

The robust financials, however, will be hard earned as airlines struggle to keep load factors above 83%, tightly control costs, invest in decarbonisation and maneuver the returns back to normal levels following the pandemic, said IATA director-general Willie Walsh at the IATA Media Global Day held in Geneva, adding that lower oil prices have provided some relief amid the challenges.

Aviation industry of Asia-Pacific (APAC) is expected to record a net profit amounting to US$3.6 billion (RM15.9 billion), representing a 1.4% net profit margin. Also, APAC is the largest market in terms of revenue passenger kilometres (RPK) with Chinese passengers accounting for over 40% of the region's air traffic.

In 2024, APAC's RPKs grew by 18.6%, fuelled in part by visa exemption policies of China, Vietnam, Malaysia and Thailand.

In the longer term, APAC's international air traffic is expected to rise 5.6% on average from 2023 to 2043, but still behind ASEAN's 6.1% average growth. (ASEAN: Association of Southeast Asian Nations)

However, global airline operators need to fix their battered post-pandemic balance sheets while tackling supply chain issues that have hampered the progress of recovery.

"...the aging fleet that airlines are using has higher maintenance costs, burns more fuel, and takes more capital to keep it flying. On top of this, leasing rates have risen more than interest rates as competition among airlines intensified and aviation operators scramble to find every way possible to expand capacity," said Walsh.

Walsh said aircraft manufacturers are letting down their airline customers and that is having a direct impact of slowing down the crucial decarbonisation efforts and the goal of net zero carbon emissions by 2050 may not be practically attainable.

Aircraft deliveries forecast for 2025 has been revised downward to 1,802, well below the 2,293 projected previously. In 2024, aircraft deliveries forecast stands at 1,254.

As reported, the backlog for new aircraft has reached a record high of 17,000 planes.