Air cargo revenue to hit $157 billion in 2025: IATA

The global airline industry is likely to report cargo revenues of $157 billion (15.6 percent of total revenues) in 2025, according to the latest update from the International Air Transport Association (IATA).

The industry is likely to carry 72.5 million tonnes of cargo in 2025, a 5.8 percent increase from 2024. Average yield is seen adjusting downwards by 0.7 percent but will still remain above pre-pandemic levels, the update added. "Freight rates (quoted in 2014 dollars/kg) are expected to be $1.34, $0.06 less than in 2024 and 24.4 percent below 2014 levels."

The cargo market has lent significant support to airline traffic in 2024, the update added. "Demand surged, thanks to effervescent cross-border e-commerce and capacity limitations in ocean shipping. The outlook for 2025 remains strong, given the ongoing challenges in maritime shipping. Global yields for air cargo stopped declining in 2023 and are now around 30 percent above pre-pandemic levels. We expect cargo yields to remain stable in 2025."

Several trends are expected to continue to be favourable for air cargo in 2025, the update added. "These include continued geopolitical uncertainty in sea shipments routed through the Suez Canal and booming e-commerce originating in Asia."

The incoming Trump Administration in the U.S. will bring several significant uncertainties, the update added. "Tariffs and trade wars would likely dampen demand for air cargo and potentially also impact business travel. Should these policies rekindle inflation with higher interest rates as a policy response, negative impacts on demand would be exacerbated. However, should the business-friendly stance of the first Trump administration continue into this term, gains from deregulation and business simplification could be significant. There is uncertainty regarding government support for aviation’s decarbonisation efforts in the U.S. until the path that the new administration will take becomes clearer."

All-time high CTK
Airlines are projected to achieve an all-time high in cargo tonne-kilometers (CTK) with demand expected to increase by 11.8 percent YoY in 2024. "This remarkable growth follows two consecutive years of declining air cargo volumes as the industry adjusted after the exceptional pandemic peak."

The expansion in air cargo traffic is supported by all regions, with YTD growth rates ranging from six percent to 16 percent. "The strongest rise has been observed among airlines registered in the Middle East and Asia Pacific. In addition to the influence of e-commerce and of ocean shipping disruptions, some of these airlines also benefit from unrestricted access to Russian airspace."

The trend of normalisation of the ratio between dedicated freighters and passenger aircraft’s belly capacity is expected to continue through 2025. "Overall, global capacity kept growing in 2024 and should continue to expand in 2025, though at a gradually decelerating rate."

The global yield for air cargo stopped falling in the second half of 2023, the update added. "Only a slight decline is expected in 2024, and the yield should remain relatively stable in 2025."

Industry revenue to exceed $1 trillion
In 2025, total industry revenue is forecast to reach $1,007 billion, an increase of 4.4 percent YoY. "This would be the first time in history that revenue will exceed the psychologically important threshold of $1 trillion. Revenue growth will largely be driven by passenger traffic growth, although it will be somewhat tempered by a decline in yields."

Net profits are expected to be $36.6 billion in 2025 for a 3.6 percent net profit margin. "That is a slight improvement from the expected $31.5 billion net profit in 2024 (3.3 percent net profit margin)."

Willie Walsh, Director General, IATA says: "This will be hard-earned as airlines take advantage of lower oil prices while keeping load factors above 83 percent, tightly controlling costs, investing in decarbonisation, and managing the return to more normal growth levels following the extraordinary pandemic recovery. All these efforts will help to mitigate several drags on profitability which are outside of airlines’ control, namely persistent supply chain challenges, infrastructure deficiencies, onerous regulation and a rising tax burden.

“In 2025, industry revenues will exceed $1 trillion for the first time. It’s also important to put that into perspective. A trillion dollars is a lot - almost one percent of the global economy. That makes airlines a strategically important industry. But remember that airlines carry $940 billion in costs, not to mention interest and taxes. They retain a net profit margin of just 3.6 percent. Put another way, the buffer between profit and loss, even in the good year that we are expecting of 2025, is just $7 per passenger. With margins that thin, airlines must continue to watch every cost and insist on similar efficiency across the supply chain, especially from our monopoly infrastructure suppliers who all too often let us down on performance and efficiency."

The most recent estimates show that airline employment is expected to grow to 3.3 million in 2025. Airlines are the core of a global aviation value chain that employs 86.5 million people and generates $4.1 trillion in economic impact, accounting for 3.9 percent of global GDP (2023 figures), the update added.