2025 Global Airlines Outlook: Continued Growth Amidst Challenges

Global air travel activity continued to grow in 2024, although profits declined slightly compared with the strong performance posted in 2023. North America and Europe faced rising operating costs and a decline in passenger yields, impacting profitability. Experts predict a modest improvement in margins for 2025 due to reduced fuel prices and a normalization of other costs.

Despite this growth, challenges remain:

• An uncertain geopolitical landscape.
• Capacity growth constraints.
• Aging aircraft fleets affecting efficiency.

Key Highlights

• The global air travel sector is anticipated to keep growing, supported by lower fuel prices.
• Delays in aircraft delivery could hinder growth and maintenance.
• Geopolitical issues pose risks for travel stability.
• Decarbonization initiatives will persist, especially in Europe.

“Overall, we expect the sector’s credit risk profile to remain Stable with some improvement in credit metrics in 2025, but geopolitical changes could alter this landscape dramatically.” - Rohit Kumar