Middle East airlines make $23 profit per passenger in 2024, the highest globally

Airlines in the Middle East are earning $23.1 in profit per passenger, the highest of any region, as they benefit from strong regional economic growth, major infrastructure investment and the closure of Russian airspace to European and US carriers.

That is about triple the average net profit per passenger for global airlines of $6.4 in 2024 and $7.9 in 2023, according to the International Air Transport Association's latest annual report, issued on Tuesday.

Middle East airlines will end 2024 with an estimated $5.3 billion in net profit, up from a June forecast of $3.8 billion for this year, and an increase from $3.1 billion in net profit in 2023, according to the latest forecast by Iata.

“The Middle East achieved the strongest financial performance in 2024 as indicated by the highest per passenger net profit among the regions,” the International Air Transport Association (Iata) said in a statement. “The Middle East was the only region to experience an increase in passenger yields in 2024, supported by a strong premium long-haul business. Despite the escalation of the conflict in Gaza, the Gulf carriers have remained largely unaffected.”

Regional airlines, particularly in the Gulf, had a strong year of profitability amid continued strong demand for air travel, a push to increase international tourist arrivals, investment in airport upgrades and government policies designed to boost the aviation sector's contribution to the gross domestic product.

Looking ahead, airlines in the Middle East are forecast to earn $5.9 billion in net profit in 2025, up from $5.3 billion this year, Iata said. Profit per passenger will soar to $23.9 next year, more than triple the global average of $7 forecast in 2025.

However, yields – or the average amount paid by a passenger to fly one kilometre – “may stabilise” in 2025, Iata said. This is because of a 9.2 per cent increase in capacity, which is just below a 9.5 per cent increase in passenger demand, the airline lobby group said.

“Ambitious growth targets for 2025 could be impacted by supply chain issues with delays in aircraft deliveries and limited engine availability,” Iata said.

A global shortage of aircraft has been pushing up fares and forcing airlines to keep older jets flying longer. Some carriers, such as Emirates, have invested billions of dollars to retrofit their older jets as they await delayed deliveries of new aircraft.

Airlines around the world have struggled to increase capacity in response to rising travel demand as supplies of jetliners are limited by parts shortages, industry-wide hiring problems and overloaded repair shops.

Global outlook

Global airlines will end the year with a net profit of $31.5 billion, which is forecast to improve next year to $36.6 billion, on lower fuel costs, fuller planes and as the number of passengers exceeds the five billion mark for the first time in 2025, according to Iata.

“This will be hard-earned as airlines take advantage of lower oil prices while keeping load factors above 83 per cent, tightly controlling costs, investing in decarbonisation, and managing the return to more normal growth levels following the extraordinary pandemic recovery,” Willie Walsh, Iata's director general, said.

“All these efforts will help to mitigate several drags on profitability which are outside of airlines’ control, namely persistent supply chain challenges, infrastructure deficiencies, onerous regulation, and a rising tax burden.”

Total industry revenues are expected to grow to $1.007 trillion in 2025, an increase of 4.4 per cent from 2024 and will be the first time that industry revenues top the $1 trillion mark. However, expenses are expected to grow 4 per cent to $940 billion.

Becoming a trillion-dollar industry means aviation accounts for almost 1 per cent of the global economy, but airlines still have thin margins and carry a cost burden of $940 billion, on top of interest and taxes, Iata said.

“The buffer between profit and loss, even in the good year that we are expecting of 2025, is just $7 per passenger,” Mr Walsh said.

“With margins that thin, airlines must continue to watch every cost and insist on similar efficiency across the supply chain – especially from our monopoly infrastructure suppliers who all too often let us down on performance and efficiency.”

Trump effect

Risks to the improved profit outlook include the prospect of the worsening wars in the Middle East and Ukraine as well as the policies of president-elect Donald Trump that bring with them “significant uncertainties”, Iata said.

“Tariffs and trade wars would likely dampen demand for air cargo and potentially also impact business travel. Should these policies rekindle inflation with higher interest rates as a policy response, negative impacts on demand would be exacerbated,” the airlines body said.

However, if the business-friendly stance of the first Trump administration continues into this term, “gains from deregulation and business simplification could be significant”.

With airlines seeking to meet their net-zero goals by 2050, there is “uncertainty regarding government support for aviation’s decarbonisation efforts in the US until the path that the new administration will take becomes clearer”, Iata said.