CAPA Insights

In 2025 airlines will make an estimated USD36 billion profit on projected revenues of USD979 billion. These are big numbers, but it equates to a net margin of a mere 3.7% or USD7.20 net profit per passenger.

This profitability "is not commensurate to the enormous value that we create at the heart of a value chain supporting 3.9% of global GDP and providing and supporting jobs for 86.5 million people," outlined Willie Walsh, Director General of International Air Transport Association (IATA) at the organisation's 2020 AGM in New Delhi, India, at the start of Jun-2025.

Governments around the world are building a competitive future for aviation because they want aviation to contribute even more to their societies and economies, says IATA Director General, Willie Walsh, but he highlights Europe as a worrying exception.

"As always, the exception is Europe," he said in his address to the airline industry at IATA's AGM in New Delhi, India at the start of Jun-2025, where we are seeing "more talk than action".

The fact that the cost of fuel is not dominating airline boardroom discussions and content at industry conferences is remarkable. It is a cost that airlines have limited control over, except for highly complicated hedging policies where some will be winners and others losers.

But right now it is described by IATA Director General, Willie Walsh as a key driver of anticipated stronger annual airline profitability in 2025. A revised outlook was released at IATA's AGM in New Delhi, India with improvements influenced largely on the back of falling oil prices.

Expedia, the US Travel Association (USTA) and the World Travel & Tourism Council (WTTC) have called for swift intervention to bolster travel demand in the US.

Recent data indicates significant declines in arrivals and intention to travel to the US from a range of visitor source markets.

68 new routes launched in the region ... On 41 of the routes (60%), the carriers are the sole scheduled operators.

The US Trump administration ended the de minimis tariff exemption for imports from China and Hong Kong on 02-May-2025. The exemption previously allowed parcels valued at USD800 or less, such as consumer e-commerce goods, to enter the US duty free.

Hongkong Post responded to the announcement in Apr-2025 by suspending acceptance of air postal items containing goods destined to the US.

The impacts of the changes are yet to be felt, but are expected to result in reduced demand and capacity.

Data indicates that imports to the US increased significantly in early 2025 in anticipation of the Trump administration's trade policies, but this surge is not expected to be sustained.

The US and China agreed in mid May-2025 to reduce tariffs and other trade restrictions for 90 days. However, 10% tariffs remain in place and the de minimis exemption was not reinstated.

CAPA - Centre for Aviation recaps some of the new route launches, resumptions, frequency increases and launch announcements by Chinese airlines to destinations in Europe in Mar/Apr-2025, as covered by CAPA - Centre for Aviation's daily news briefs:

SSO denotes the carrier being the "Sole Scheduled Operator" on the route, according to OAG and the CAPA Route Changes Database.

A recently published analysis from CAPA - Centre for Aviation noted that in an update of its World Economic Outlook, the International Monetary Fund (IMF) has cut its global growth forecasts.

The US and Europe are forecast to have weaker GDP growth than any other major world region, which is likely to mean weakening demand for North Atlantic air traffic. Indeed, there was a 17% year-on-year fall in visitors by air from Western Europe to the US in Mar-2025.

A GBTA poll has also shown a halving of optimism levels among travel professionals between Nov-2024 and Apr-2025. Now, the latest 'Monitoring Sentiment for Intra-European Travel' report from the European Travel Commission (CTC) reveals European travel intentions for summer 2025 have dipped. But, that is where the bad news ends.

The Association of Southeast Asian Nations (ASEAN) is a union of 10 Southeast Asian states with a combined population of 677 million. A region that holds immense potential for air traffic growth where air passenger numbers are expected to double in the next decade.

However, In its latest 'Chart of the Week' IATA identifies a widening gap between the region's larger and smaller markets and a need for ASEAN governments to work to unlock the full potential of air transport to ensure inclusive economic growth.

Thailand's Koh Samui Island is set to see a spike in tourism interest as the setting of The White Lotus' third season.

The HBO show is a cultural phenomenon and has previously seen audiences flock to the locations it films at, with Hawaii and Sicily, the settings of two previous seasons, also witnessing a tourism surge.