National harmony is not an option but a mandatory necessity, asserted Anwar.
Buckle Up, Jetsetters: IATA Cuts 2025 Profit Forecast Amid Global Economic Turmoil
Get ready to zip through the skies, but keep your wallet closed a little tighter - global airlines are bracing for leaner times ahead. According to the International Air Transport Association (IATA), profits for the industry in 2025 will reach a mere $36 billion, down from the previously anticipated $36.6 billion.
Why such a dip? It's all about those economic headwinds. IATA's Director General Willie Walsh broke the news at the organization's annual general meeting in New Delhi, attributing the lower forecast to a slew of challenges facing the global economy.
One of the main offenders? Good old-fashioned trade tensions. Alongside a decline in consumer confidence, these issues have cast a shadow over demand projections and boosted uncertainty in the market. But despite the gloomy outlook, Walsh maintained a positive note, praising the airlines' resilience.
Speaking to the IATA delegates, Walsh urged policymakers to spare the aviation sector from increased tariffs, although he didn't specifically call out any world leaders (cough, cough, Trump). He stresses the wider impact the industry has, supporting millions of jobs and contributing to around 3.9% of global economic activity.
Looking at the numbers, it's still a thin margin - about $7.20 per passenger per segment. The industry's profits may be on an upward trend, but any additional taxes, rising costs, or regulatory setbacks could test the aviation sector's resilience once more.
Despite the setbacks, the show must go on. Airlines are expected to transport 69 million tonnes of cargo in 2025, a drop from the 72.5 million previously forecast. While the cargo sector is no stranger to risk, its robustness has helped soften the impact of lowered demand and ongoing trade tensions.
Dip into your savings, jetsetters, but remember that the proverbial skies are still open for business. Bottom line: bracing for a bit of turbulence ahead, but the airlines are doing their best to steer through the storm.
Key Drivers of the Forecast Revision:- Trade Tensions and Consumer Confidence: ongoing disputes and a decline in confidence have strained demand and added uncertainty.- Jet Delivery Delays: manufacturing delays have slowed airlines' expansion plans.- Lower Oil Prices: lower oil prices have offered some protection against rising costs, with jet fuel costs down 13% compared to 2024.- Record Passenger and Cargo Volumes: despite economic uncertainties, airlines are still expected to carry more passengers and cargo in 2025 than in the previous year.
Economic and Industry Context:- Global GDP Slowdown: the global GDP growth forecast has dropped from 3.3% in 2024 to 2.5% in 2025.- Profitability Metrics: the $36 billion industry profit equates to around $7.20 per passenger per segment, emphasising the slender margins within the industry.
- The International Air Transport Association (IATA) has revealed that the global economy's turbulence will lead to lower profits for airlines in 2025, with the industry forecast to make only $36 billion, a decrease from the previous estimate of $36.6 billion.
- IATA's Director General Willie Walsh attributed this lower forecast to various challenges facing the global economy, including trade tensions and a decline in consumer confidence.
- Despite the forecast revision, Walsh emphasized the significance of the aviation sector in supporting millions of jobs and contributing to around 3.9% of global economic activity.
- Additionally, Walsh highlighted ongoing jet delivery delays as another factor contributing to the revised forecast, as these delays have slowed airlines' expansion plans.
