Aviation Industry Overview: What to Expect in 2025

The year 2024 demonstrated another strong year of aviation resiliency and growth, with traffic recovering and surpassing 2019 levels despite a challenging environment. Established aviation markets in Western Europe and North America maintained demand, while emerging aviation markets, namely Northern Africa, Eastern and Central Europe and Central Asia experienced the highest growth, outpacing industry average (8.9% year-on-year growth). Despite rising costs and capacity expansion limitations, 2024 is expected to report a strong profit of 3.3% net profit margin exceeding the 3.1% margin in 2019. Here’s what to expect in 2025.

#1 Sustained Stabilisation and Growth in Air Traffic Patterns: Despite ongoing uncertainties relating to conflicts and potential policy shifts from the new US administration. This traffic growth is underpinned by a notably stable global economy, projected to maintain ad GDP growth rate between 2.5% and 3.0% into 2025. The International Air Transport Association (IATA), a trade association of the world’s airlines, forecasts that global air passenger numbers in 2025 will reach 5.2 billion passengers versus 4.6 in 2019. This momentum will be driven by the robust and resilient performance in the largest passenger markets and the resurgence of international travel, particularly in Asia Pacific region.

#2 Cost Pressures to Stay for Airlines: This is primarily due to two factors: (i) ongoing labour shortages, which are driving up demands for salary increases; and (ii) escalating maintenance costs stemming from of engine-related groundings limiting capacity expansion, coupled with an ageing global fleet. Airlines are retaining older aircraft due persistent production challenges and supply chain issues. The average age of global commercial fleet reach 14.8 years in 2024 compared to an average 13.6 years from 1990 to 2023. This ageing fleet leads to higher maintenance, greater fuel burn than newer technology aircraft, and potentially larger capital expenditure for unplanned retrofits.

#3 Increased Consolidation: This trend is driven by: (i) the challenging environment characterised by rising operational costs, competitive pressures and limited capacity, which makes it difficult for smaller or financial distressed airlines to survive; and (ii) incoming US administration’s anticipated business-friendly approach, relaxing regulatory constraints on mergers and acquisitions. Such consolidation will result in more robust and financially stable airlines. Additionally, the aircraft leasing sector may also experience some M&A activity. Continued supply chain constraints will drive demand for existing aircraft making it advantageous for leasing companies to acquire smaller leasing platforms and optimise their fleets.

About the Author: Leanne Brolly is Vice President of Risk at Genesis Aircraft Leasing (‘’Genesis’’) and DCU graduate of the MSc in Finance and B.A. Hons in Accounting & Finance. Genesis is a full-service commercial aircraft leasing company with a global customer base headquartered in Dublin. 2024 marks Genesis’ 10 years as a business, and it has launched the Next Ten initiative focused on customer opportunities and needs over the next ten years.
Sources: IATA Global Outlook 2025 (published December 2024) and OECD.