• Global airlines forecast a combined profit of $36 billion in 2025.
• Profit expectations are down from a previous estimate of $36.6 billion.
• Trade tensions and supply chain disruptions are major causes for the adjustment.
• Aircraft delivery delays are impacting operational efficiency.
• Total industry expenses are expected to rise to $913 billion in 2025.

Global airlines are now anticipating a combined profit of $36 billion for 2025, reflecting a decrease from the earlier prediction of $36.6 billion. This adjustment is attributed to ongoing trade tensions and a drop in consumer confidence, alongside significant delays in jetliner deliveries that have affected growth plans. The International Air Transport Association (IATA) indicated that this profit forecast, although a rise from the previous year's $32.4 billion, translates to just $7.20 per passenger per segment, which offers limited protection against potential future market fluctuations, according to Reuters, Channel News Asia, and India Times.

IATA Director General Willie Walsh also warned that the lean profit margins could be further strained by factors such as increased taxes and regulatory costs as the industry seeks to stabilize following a tumultuous recovery from the COVID-19 pandemic. Despite strong employment and a slight easing of inflation, revenues are predicted to rise by only 1.3% to $979 billion, falling short of earlier forecasts, as prolonged economic uncertainties continue to affect consumer behavior, according to Reuters and Channel News Asia.

The airline industry is grappling with significant delivery delays for aircraft due to supply chain issues. IATA has reported a backlog of 17,000 aircraft and noted that about 1,100 relatively new planes remain in storage. Walsh characterized the delays as "off-the-chart unacceptable," stressing the impact on airlines that are unable to meet rising demand, particularly in key markets. As a consequence, operational costs are increasing due to airlines having to maintain older fleets, according to Reuters, Channel News Asia, and India Times.

In terms of expenses, total costs for the airline industry are predicted to rise to $913 billion by 2025, up 1% compared to the previous year, primarily due to increasing maintenance costs while lower fuel prices help alleviate some financial pressure. IATA has also projected a decline in cargo revenues by 4.7% to $142 billion in the coming year, attributed to diminished economic growth and the consequences of protectionist policies, including tariffs imposed during trade conflicts. Walsh highlighted that consumers will likely bear the brunt of increased operational costs, underlining a trend that could influence ticket pricing as the industry navigates these challenges, according to Reuters, Channel News Asia, and India Times.