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Airline growth seen driven by decline in fuel prices

by June 9, 2025
by June 9, 2025 0 comment

THE International Air Transport Association (IATA) expects strong growth in the airline industry, particularly in Asia, driven by falling jet fuel prices and the loosening of visa restrictions. 

“Asia-Pacific is the largest market in terms of RPK (revenue passenger kilometers) with China accounting for over 40% of the region’s traffic. Passenger demand is expected to be strong given the relaxation in visa requirements in several Asian countries,” IATA said in a recent report.

For 2025, the airline industry is projected to show improvement despite global economic uncertainty, it said.

IATA, a trade association of airlines, said the aviation industry is expected to post net profit of $36 billion, against $32.4 billion posted in 2024.

“The first half of 2025 has brought significant uncertainties to global markets. Nonetheless, by many measures including net profit, it will still be a better year for airlines than 2024, although slightly below our previous projections,” William M. Walsh, IATA director general, said in a statement.

Mr. Walsh said the main driver for this projection is the falling price of jet fuel, which is now 13% lower compared with 2024.

“Moreover, we anticipate airlines flying more people and more cargo in 2025 than they did in 2024, even if previous demand projections have been dented by trade tensions and falls in consumer confidence,” he said.

IATA anticipates travelers to hit 4.99 billion this year, up 4%; while total air cargo volume may hit 69 million tons.

“Despite some on and off hiccups in our economic progress, the aviation industry will continue to face brighter prospects for the rest of the year,” Nigel Paul C. Villarete, senior advisor at technical advisory group Libra Konsult, Inc. said via Viber on Monday.

According to IATA, jet fuel is expected to average $86 per barrel in 2025, below the $99 average in 2024, which could translate into a total fuel bill of $236 billion, accounting for 25.8% of all operating costs.

In the Philippines, the Civil Aeronautics Board (CAB) has reduced the airline passenger fuel surcharge to Level 3 for June.

Last month, analysts said airlines are projected to generate higher revenue in the second quarter on strong travel demand and higher passenger volumes.

For the first quarter, air passenger volume rose 10.9% to 15.98 million in the first quarter, driven by a surge in domestic traffic, the CAB reported.

“People are looking for better prospects, especially in the economic sector. Most of these would probably be driven by the trade and tourism sectors as both will have stronger growth drivers both in the national and international fronts,” Mr. Villarete said. — Ashley Erika O. Jose

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