GLOBAL airlines body International Air Transport Association (Iata) has forecast industry-wide 2025 revenue of more than a trillion US dollars and record passenger numbers, despite what its chief Willie Walsh said on Tuesday (Dec 10) were “unacceptable” difficulties in securing new planes.
Airlines around the world have seen their growth hampered by delays in jet deliveries stemming from problems at Boeing and Airbus as well as their suppliers.
Without newer, more efficient planes, airlines say they cannot cut back fuel costs while flying more people.
“We have given them time. I think our patience has run out. The situation is unacceptable,” Iata director general Walsh told reporters in Geneva.
Walsh said suppliers were acting like “quasi-monopolies” and appeared to be benefiting from the problems they had caused. Critics say the delays have pushed up prices of spare parts, creating a windfall for suppliers at the expense of airlines.
“We are going to have to ramp up the pressure and maybe look for support to force key suppliers to get their act together,” said Walsh, who was previously head of British Airways and its parent company IAG.
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Airbus, the world’s largest planemaker, cut delivery targets in July and Boeing has slowed production because of a strike and increased regulatory attention following a safety crisis.
Engine makers have also had a series of setbacks.
The aerospace industry said it is gradually returning to normal but has warned of supply pressures well into 2025.
It is not the first time that the airline industry has lashed out at its suppliers. In 2023, Walsh said airlines were “beyond frustrated” at shortages of new planes and spare parts.
In June last year, airlines asked Iata to hold talks with plane makers to seek a solution. Industry sources said that despite at least one such meeting, little tangible progress had been made, with many suppliers still reeling from the pandemic.
Trillion US dollars
Despite the problems, Iata said it expected the airline industry to hit a historic milestone with revenue of US$1.007 trillion next year, up from a projected US$964 billion this year.
It forecast industry-wide net profit of US$36.6 billion in 2025, up from US$31.5 billion expected in 2024, with a record 5.2 billion passengers set to fly.
That comes after the industry collapsed to a US$140 billion loss in 2020 as a result of the pandemic.
Airlines have recovered thanks to a rebound in travel demand, but have drawn criticism from environmental groups for boosting profits by adding flights, harming the environment.
“If the amount of planes in the sky goes up, emissions will only keep going up more and more even if the planes are marginally more efficient,” Matt Finch, UK policy manager of advocacy group Transport and Environment, said earlier this year.
Jet fuel prices are also set to fall, offering some relief.
Trump net positive
Walsh was upbeat about US president-elect Donald Trump returning to the White House, saying that his actions in his first term had boosted airlines.
“The indication is that the second Trump administration is likely to reverse some of the actions that were taken under the (Joe) Biden administration,” he said.
“I would see the Trump administration as being a net positive for the industry,” he said, without giving details.
Investors anticipate that a pro-business Trump administration could boost corporate travel, support M&A and introduce aviation-friendly policies, while Trump’s support of US oil production may lower fuel costs.
However, uncertainty tied to conflicts in the Middle East and Ukraine could pose risks, said Iata, which expects 2025 passenger yields, the average amount paid by a passenger to fly one mile, to fall by 3.4 per cent versus 2024.
Some economists say possible tariffs could also hamper trade and business confidence, both closely watched by airlines. REUTERS
