‍DELHI – The IATA's 2025 outlook for the global airline industry forecasts record numbers, with nearly 5 billion passengers over 40 million flights, and a global revenue forecast exceeding US$1 trillion for the first time. The numbers look impressive, but if we scratch the surface, we’ll find an industry walking a tightrope between profitability, safety, and sustainability. 

Profit—But Just Barely

For most industries, a projected US$36 billion profit sounds like a windfall. For airlines in 2025, it’s a tight squeeze, as when it is broken down, it amounts to a Profit forecast that would equate to US$7.20 per passenger—barely enough to buy a coffee at the airport.

“While these numbers are significant, they equate to a net margin of a mere 3.1%,” said Willie Walsh, Director General, IATA. “It’s a tough business, but airlines are showing resilience.”

Airlines are making money again after recovering from the COVID-19 pandemic, but that profitability is fragile. Operating costs remain high, and capacity constraints are straining airlines' ability to meet demand efficiently.

Safety First, Always

Despite all the financial pressures, aviation in 2024 was impressively safe. With over 40 million flights expected this year, IATA reports an all-accident rate of just 1.13 per million flights, and a fatality risk of 0.06, meaning the average traveler would need to take one flight per day for 18,000 years to experience a fatal accident.

Still, Walsh warns against complacency.

“Aviation has long been the safest form of transport. Our goal remains zero accidents and zero fatalities,” he said.

A key concern, however, is the slow pace of government accident investigations. Final reports are often delayed by years, hindering the industry’s ability to learn and improve. “Safety is a team effort, and governments need to step up,” Walsh added.

A Growing Demand, A Shrinking Supply

If airlines are struggling to grow, it’s not for lack of demand—it’s a matter of aircraft availability. IATA reported that as of late 2024, there was a backlog of 17,000 aircraft in global orders. That’s equal to 50% of the world’s current fleet. At today’s production rates, IATA estimates it will take over 13 years to clear the logjam.

Much of the blame lies with aircraft manufacturers, who are still recovering from pandemic-era disruptions and ongoing supply chain issues.

“It’s unacceptable that manufacturers estimate it could take until the end of this decade to sort this mess out,” Walsh said bluntly.

The ripple effect? Airlines can’t grow as fast as passengers are returning. Older planes stay in service longer, affecting both efficiency and emissions targets.

The SAF Dilemma: Flying Cheaper, Not Just Cleaner

Sustainability remains the biggest challenge facing aviation today. To meet its commitment to net-zero emissions by 2050, the industry is banking on Sustainable Aviation Fuel (SAF)—but production is crawling.

In 2024, global SAF production reached 1 million tonnes—a threefold increase from 2023 —but still accounted for only 0.3% of total jet fuel usage.

“Despite the tripling of SAF production, we still have a long way to go,” said Walsh. “Governments must implement supportive policies to accelerate growth.”

IATA believes 65% of aviation’s carbon reductions by 2050 must come from SAF. But that will require exponential scaling—something that won’t happen without government subsidies, mandates, or other incentives to attract investment.

Airports, Red Tape, and the Fight for Efficiency

If SAF is the fuel of the future, infrastructure is the runway that gets us there.

Airports around the world are scrambling to expand capacity. In India, massive investments are underway to meet growing domestic and international demand. But physical growth isn’t enough—policy and regulation must evolve, too.

“Bad regulation can destroy value,” Walsh warned. “We must resist short-sighted measures that undermine competitiveness.”

IATA’s Director General singled out the EU’s controversial Regulation 261, which forces airlines to compensate passengers even when delays are outside their control—a well-intended law, but one with steep operational consequences.

The Flight Path Ahead

Profitability is slowly returning. Safety remains rock-solid. Airlines are investing, innovating, and growing—albeit with heavy headwinds. However, without faster aircraft deliveries, smarter regulation, and a radical boost in SAF production, the industry risks turbulence ahead.

The skies are busy again. Now the challenge is to make that growth sustainable, profitable, and safe for the generations to come.