Airlines on edge

The aviation industry faces multiple threats to its business, from US tariffs to conflict zones around the world, writes Molpasorn Shoowong

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Despite improving financially this year, the aviation industry is still bracing for uncertainties from tariff policies, geopolitical conflicts and supply chain disruption, according to the International Air Transport Association (IATA).

Speaking at IATA's annual summit in New Delhi this week, IATA director-general Willie Walsh said that even though airline revenue this year is projected to record a record high of US$979 billion, this is a downgrade from $1 trillion forecast in December due to softer demand.

Lower fuel prices should help offset expenses, leading to net profit of $36 billion with a margin of 3.7% this year, improving from $32.4 billion and a 3.4% margin recorded in 2024, according to IATA.

The average jet fuel price is expected to hover around $86 per barrel, down from around $99 per barrel last year.

While global GDP growth is expected to hit 2.5% in 2025, which could have an impact on the aviation industry, the IATA still expects "healthy growth" in revenue passenger kilometres of 5.8% year-on-year, led by Asia-Pacific at 9%. Airlines' passenger revenue is expected to reach $693 billion.

Strong competition and a lower oil price continue to benefit passengers, with average airfares at $374 this year, or around 40% lower than that of 2014, said Mr Walsh.