…Carriers raise concerns about high operating costs in Nigeria, others
World airlines have estimated a net profit of $36.6 billion in 2025, from a 3.6 per cent net profit margin. The projection is slightly improved from the expected $31.5 billion net profit in 2024 (3.3 per cent net profit margin). The average net profit per passenger is expected to be $7.0 (below the $7.9 high in 2023 but an improvement from $6.4 in 2024).
At the regional end, all sections are expected to show improved financial performance in 2025 compared to 2024, and all regions are expected to deliver a collective net profit in 2024 and 2025. Africa’s carriers, including Nigerian airlines, face high operational costs and a low propensity for air travel expenditure in many of their home markets A significant issue is a shortage of U.S. dollars in some economies, which, along with infrastructure and connectivity challenges, hinder the airline industry’s expansion and performance.
Despite these obstacles, sustained demand for air travel is expected to improve the region’s profitability marginally in 2025 The International Air Transport Association (IATA), in its financial outlook for the global airline industry in 2025, estimated that operating profit in 2025 is expected to be $67.5 billion for a net operating margin of 6.7 per cent (improved from 6.4 per cent expected in 2024). The return on invested capital (ROIC) for the global industry is expected to be 6.8 per cent.
While this is an improvement from the 2024 ROIC of 6.6 per cent, the returns for the industry at the global level remain below the weighted average cost of capital. ROIC is the strongest for airlines in Europe, the Middle East, and Latin America, where it did exceed the cost of capital. Total industry revenues are expected to be $1.01 trillion. That is a 4.4 per cent increase from 2024 and will be the first time that industry revenues top the $1 trillion mark. Expenses are expected to grow by 4.0 per cent to $940 billion. Passenger numbers are expected to reach 5.2 billion in 2025, a 6.7 per cent rise compared to 2024, and the first time the number of passengers has exceeded the five billion mark.
Cargo volumes are expected to reach 72.5 million tonnes, a 5.8 per cent increase from 2024. IATA’s Director-General, Willie Walsh, said they expect airlines to deliver a profit of $36.6 billion as airlines take advantage of lower oil prices while keeping load factors above 83 per cent, tightly controlling costs, investing in decarbonisation, and managing the return to more normal growth levels following the extraordinary pandemic recovery.
