Airlines on Monday revised down their traffic and profit forecasts for this year, citing “headwinds” for the global economy, with industry chiefs warning of the risk of increased tariffs impacting the sector.
The International Air Transport Association (IATA) estimates fewer than 5 billion air journeys would take place this year, compared with the previously forecast 5.22 billion.
“The first half of 2025 has brought significant uncertainties to global markets,” IATA director-general Willie Walsh told its annual general meeting in New Delhi.
Photo: AFP
However, “considering the headwinds, it’s a strong result that demonstrates the resilience that airlines have worked hard to fortify,” he added.
Cumulative airline profits would reach US$36 billion this year, US$600 million less than expected, the IATA said.
Commercial aviation revenues are expected to remain below the US$1 trillion forecast in December last year, with the IATA now reporting US$979 billion.
Walsh, addressing IATA delegates, called for the aviation sector to be spared from increased tariffs, although he did not name US President Donald Trump, who unveiled sweeping duties on trading partners in April.
While looking at profits, Walsh warned that “perspective is critical” to put industry-wide figures into context, saying that per passenger, it was still a narrow margin.
“It’s still a thin buffer and any new tax, increase in airport or navigation charge, demand shock or costly regulation will quickly put the industry’s resilience to the test,” he said.
“Policymakers who rely on airlines as the core of a value chain that employs 86.5 million people and supports 3.9 percent of global economic activity must keep this clearly in focus,” he added.
The IATA also expects 69 million tonnes of cargo to be transported by air this year, down from the 72.5 million tonnes previously expected.
A barrel of Brent North Sea crude, the international oil benchmark, stands below US$65 as a result of Trump’s tariffs, his call to “drill baby drill” and especially a decision by the OPEC+ members to hike crude output quotas.
This represents an immediate boon for airlines. Jet fuel is expected to average US$86 a barrel this year, well below the US$99 average last year, “accounting for 25.8 percent of all operating costs,” the IATA said.
The total fuel bill of US$236 billion for this year is US$25 billion lower than last year.
Among the “risks” weighing on commercial aviation, the IATA identified conflicts such as the war in Ukraine, as well as “trade tensions.”
“Tariffs and prolonged trade wars dampen demand for air cargo and potentially travel,” the IATA said.
“Additionally, the uncertainty over how the Trump administration’s trade policies will evolve could hold back critical business decisions that drive economic activity, and with it the demand for air cargo and business travel,” it added.
With an approval rating of just two percent, Peruvian President Dina Boluarte might be the world’s most unpopular leader, according to pollsters. Protests greeted her rise to power 29 months ago, and have marked her entire term — joined by assorted scandals, investigations, controversies and a surge in gang violence. The 63-year-old is the target of a dozen probes, including for her alleged failure to declare gifts of luxury jewels and watches, a scandal inevitably dubbed “Rolexgate.” She is also under the microscope for a two-week undeclared absence for nose surgery — which she insists was medical, not cosmetic — and is
CAUTIOUS RECOVERY: While the manufacturing sector returned to growth amid the US-China trade truce, firms remain wary as uncertainty clouds the outlook, the CIER said The local manufacturing sector returned to expansion last month, as the official purchasing managers’ index (PMI) rose 2.1 points to 51.0, driven by a temporary easing in US-China trade tensions, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The PMI gauges the health of the manufacturing industry, with readings above 50 indicating expansion and those below 50 signaling contraction. “Firms are not as pessimistic as they were in April, but they remain far from optimistic,” CIER president Lien Hsien-ming (連賢明) said at a news conference. The full impact of US tariff decisions is unlikely to become clear until later this month
GROWING CONCERN: Some senior Trump administration officials opposed the UAE expansion over fears that another TSMC project could jeopardize its US investment Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is evaluating building an advanced production facility in the United Arab Emirates (UAE) and has discussed the possibility with officials in US President Donald Trump’s administration, people familiar with the matter said, in a potentially major bet on the Middle East that would only come to fruition with Washington’s approval. The company has had multiple meetings in the past few months with US Special Envoy to the Middle East Steve Witkoff and officials from MGX, an influential investment vehicle overseen by the UAE president’s brother, the people said. The conversations are a continuation of talks that
Alchip Technologies Ltd (世芯), an application-specific integrated circuit (ASIC) designer specializing in artificial-intelligence (AI) chips, yesterday said that small-volume production of 3-nanometer (nm) chips for a key customer is on track to start by the end of this year, dismissing speculation about delays in producing advanced chips. As Alchip is transitioning from 7-nanometer and 5-nanometer process technology to 3 nanometers, investors and shareholders have been closely monitoring whether the company is navigating through such transition smoothly. “We are proceeding well in [building] this generation [of chips]. It appears to me that no revision will be required. We have achieved success in designing
RSS