IATA lowers 2025 air cargo outlook

IATA revised its 2025 air cargo outlook to 69 million tonnes, down 4.8% from the previous outlook of 72.5 million tonnes.

The new outlook is still a 0.6% improvement from 2024, IATA said in a June 2 release. However, cargo revenues are expected to be $142 billion in 2025, down 4.7% from 2024.

[caption id="attachment_57147063" align="aligncenter" width="1600"] (Courtesy/Canva)[/caption] This is primarily based on the expected impact of reduced gross domestic product (GDP) growth, which is “largely influenced by trade-dampening protectionist measures, including tariffs,” IATA said.

Global GDP growth is expected to fall to 2.5% in 2025 from 3.3% in 2024, IATA said. As a result, air cargo growth is expected to slow to 0.7% in 2025 from 11.3% in 2024. The cargo yield is also expected to fall by 5.2% year over year.

Nevertheless, air cargo traffic in April rose 5.8% YoY and 6.5% YoY on international lanes.

2025 outlook, risks IATA expects airlines to see total revenues at a record high of $979 billion in 2025, up 1.3% from 2024, but below the $1 trillion projected in December 2024, the trade group said. Net profits are estimated to be $36 billion in 2025, improved from the $32.4 billion earned in 2024, but lower than the projected $36.6 billion.

“The first half of 2025 has brought significant uncertainties to global markets,” IATA Director General Willie Walsh said in the release. “Nonetheless, by many measures including net profits, it will still be a better year for airlines than 2024, although slightly below our previous projections.

“The biggest positive driver is the price of jet fuel , which has fallen 13% compared with 2024 and 1% below previous estimates,” he said. “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.”

Tariffs and prolonged trade wars dampen demand for air cargo, IATA said. Uncertainty surrounding the Donald Trump administration’s trade policies could hold back critical business decisions that drive economic activity, and with it the demand for air cargo.

SAF headwind Sustainable aviation fuel (SAF) production is expected to grow to 2 million tonnes in 2025, accounting for 0.7% of airline fuel use, IATA said. SAF production will double from the 1 million tonnes produced in 2024, all of which was purchased by airlines.

IATA estimates that the average cost of SAF in 2024 was 3.1 times that of jet fuel, for a total additional cost of $1.6 billion. In 2025, the global average cost for SAF is expected to be 4.2 times that of jet fuel.

This extra cost is largely the result of SAF compliance fees being levied by European fuel suppliers to hedge their potential costs stemming from European SAF mandates to include 2% SAF in the jet fuel supply, IATA said.

“The behavior of fuel suppliers in fulfilling the SAF mandates is an outrage,” Walsh said. “The cost of achieving net zero carbon emissions by 2050 is estimated to be an enormous $4.7 trillion. Fuel suppliers must stop profiteering on the limited SAF supplies available and ramp up production to meet the legitimate needs of their customers.”

Supply chain issues The aircraft backlog exceeds 17,000, with an implied wait time of fourteen years, IATA said. The extended wait for passenger aircraft and production aircraft is causing carriers to delay P2F conversions and keep aging freighters in service longer than planned.

“Should states exit from a multilateral agreement exempting aircraft from tariffs, supply chain constraints and production limitations could be further aggravated,” IATA said.

Supply chain issues have had significant negative impacts on airlines by:

Driving-up leasing costs; Increasing fleet age; Cutting the fleet replacement rate to half of the 5% to 6% of 2020; and Reducing fleet utilization efficiency. Issues in the supply chain for engines and spare parts exacerbate the situation.

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