OECD lowers 2025 US GDP forecast to 1.6% (previously 2.2%), and cuts 2026 forecast from 1.6% to 1.5%.

OECD lowers 2025 US GDP forecast to 1.6% (previously 2.2%), and cuts 2026 forecast from 1.6% to 1.5%.

The International Air Transport Association (IATA) has released its updated financial outlook for 2025, reflecting a modest improvement in airline profitability despite challenging global economic conditions. The organization projects net profits to reach $36.0 billion, up from $32.4 billion in 2024, but slightly below the previously projected $36.6 billion [1].

Key highlights from the expected 2025 financial performance include:
- Net profit margin at 3.7%, up from 3.4% in 2024.
- Return on invested capital at 6.7%, up from 6.6% in 2024.
- Operating profits at $66.0 billion, up from $61.9 billion in 2024.
- Total revenues reaching a record high of $979 billion, up 1.3% on 2024.
- Total expenses at $913 billion, up 1.0% on 2024.

Total traveler numbers are projected to reach 4.99 billion, up 4% on 2024, and total air cargo volumes to reach 69 million tonnes, up 0.6% on 2024 [1].

The improved financial outlook is attributed to a 13% decrease in jet fuel prices compared to 2024 and the anticipation of increased passenger and cargo traffic, despite trade tensions and reduced consumer confidence. However, the industry continues to face significant challenges, including supply chain disruptions and the impact of geopolitical uncertainties [1].

The OECD's recent forecast, which lowered the 2025 US GDP projection to 1.6% (down from 2.2%) and cut the 2026 forecast from 1.6% to 1.5%, underscores the broader economic challenges that airlines are navigating. Despite these headwinds, IATA expects airlines to demonstrate resilience and maintain profitability [2].

The outlook for 2025 remains cautiously optimistic, with the industry poised to benefit from lower fuel costs and increased travel demand. However, ongoing geopolitical tensions and trade disputes pose significant risks to the industry's growth and profitability.

References:
[1] https://www.iata.org/en/pressroom/2025-releases/2025-06-02-01/
[2] OECD Lowered 2025 US GDP Forecast to 1.6%