"Prices will continue to rise" How much profit airlines make on your flight ticket

According to a forecast by its umbrella organization, airlines are likely to make an average net profit of just 6.4 dollars per passenger this year. This is significantly less than last year.

Keystone-SDA

10.12.2024, 11:15

10.12.2024, 13:40

SDA

"Passengers must be prepared for higher ticket prices as costs continue to rise," said Marie Owens Thomsen, Chief Economist of the International Air Transport Association (IATA) on Tuesday in Geneva. According to the forecast, the global average net profit per passenger is expected to rise to 7 dollars.

IATA is expecting a record for 2025: passenger numbers are likely to exceed five billion for the first time. It expects 5.2 billion passengers, 6.7 percent more than this year.

In Europe, the net profit per passenger is higher than the global average: IATA estimates 8.2 dollars for this year, behind the USA with 10.3 dollars and the Middle East with 23.1 dollars. This profit is expected to rise everywhere next year, in Europe to 9.2 dollars per passenger.

Overall, the association anticipates higher profits this year than expected twelve months ago and a further increase in 2025. The net profit forecast for this year is 31.5 billion dollars and 36.6 billion dollars for 2025.

Inflation and growing competition

Owens Thomsen said that the industry is under price pressure from above because it has little influence on many prices, such as airport charges and air traffic control services, but also from suppliers such as engine and machine manufacturers, some of whom exploit their monopoly position and dictate high prices.

Pressure is coming from below due to the strong competition: every passenger can compare prices at any time and on any route, which makes it difficult to raise prices.

Around 340 airlines from more than 120 countries are organized in IATA, including Lufthansa. They transport around 80 percent of global air traffic, passengers and air freight.