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RIYADH: Middle East airlines are forecast to post the world’s highest net profit margin in 2025 of 8.7 percent, outpacing global peers, according to the latest industry report. 

The forecast, released by the International Air Transport Association during its 81st Annual General Meeting in New Delhi, also projects that airlines operating in the Middle East will generate a net profit of $6.2 billion this year — slightly up from $6.1 billion in 2024. The region is also expected to earn $27.20 per passenger.

Globally, airlines are projected to record a net profit of $36 billion, with total industry revenue reaching $979 billion — below IATA’s earlier $1 trillion estimate, due in part to macroeconomic uncertainties and supply constraints. 

The growth of the aviation sector in the Middle East reflects broader regional expansion, as countries such as ������Ƶ and the UAE continue to bolster the industry as part of their economic diversification efforts. 

In its report, IATA stated: “The Middle East will generate the highest net profit per passenger among the regions. Robust economic performance is supporting strong air travel demand, both for business and leisure travel.” 

It added: “However, with delays in aircraft delivery, the region will see limitations in capacity as airlines embark on retrofit projects to modernize their fleet, hence limiting growth.” 

According to IATA, revenue per passenger in 2025 is expected to reach $11.10 in North America, followed by $8.90 in Europe, $3.40 in Latin America, $2.60 in Asia Pacific, and $1.30 in Africa.

Global outlook 

While airlines globally are expected to earn a collective $36 billion in profit in 2025, up from $32.4 billion in 2024, the figure is slightly below the $36.6 billion projected in December. The average net profit per passenger remains modest at $7.20, according to IATA. 

IATA Director General Willie Walsh said the first half of 2025 has brought notable uncertainty to global markets. Still, he noted, airline performance is expected to surpass 2024 levels, though it will fall slightly short of earlier forecasts. 

“The biggest positive driver is the price of jet fuel which has fallen 13 percent compared with 2024 and 1 percent below previous estimates,” he said. 

Walsh added: “Moreover, we anticipate airlines flying more people and more cargo in 2025 than they did in 2024, even if previous demand projections have been dented by trade tensions and falls in consumer confidence.” 

He noted that considering the headwinds, this is a strong result that “demonstrates the resilience that airlines have worked hard to fortify.” 

Operating profit for global airlines is expected to reach $66 billion in 2025, up from $61.9 billion the previous year. Total expenses are projected at $913 billion in 2025, marking a 1 percent increase from 2024. 

“Our profitability is not commensurate to the enormous value that we create at the heart of a value chain supporting 3.9 percent of global GDP and providing and supporting jobs for 86.5 million people,” said Walsh. 

Passenger revenue in 2025 is expected to increase by 1.6 percent year on year to reach an all-time high of $693 billion. 

Passenger growth, measured in revenue passenger km, is projected at 5.8 percent — a normalization following the double-digit growth during the pandemic recovery. 

Cargo revenues are expected to decline by 4.7 percent to $142 billion in 2025, driven by sluggish global economic growth and trade-dampening protectionist measures, including tariffs. 

Air cargo growth is expected to slow to 0.7 percent in 2025 from 11.3 percent in 2024. Cargo yield is also projected to decline by 5.2 percent, reflecting slower demand growth and lower oil prices. 

Fleet and backlog issue 

The IATA director general criticized aircraft manufacturers for long delivery backlogs, noting that more than 17,000 aircraft are on order, with wait times of up to 14 years, stalling growth opportunities across regions. 

“The number of deliveries scheduled for 2025 is 26 percent less than what was promised a year ago,” said Walsh. 

He warned that the backlog will negatively impact revenues as demand remains unmet, while scarcity drives up maintenance and leasing costs. 

“It’s just not acceptable that manufacturers estimate it could take until the end of the decade to sort this mess out,” said Walsh. 

Walsh also highlighted recent infrastructure advancements, including the opening of new secondary airports in New Delhi and Mumbai, and the phased launch of the world’s largest airport in Dubai. 

“Governments around the world are building a competitive future for aviation because they want aviation to contribute even more to their societies and economies,” added Walsh. 

Sustainability and SAF 

Walsh also emphasized the importance of sustainability in aviation, urging the sector to leverage all available decarbonization tools.

He called for global cooperation to advance decarbonization efforts.

IATA reported that sustainable aviation fuel production is expected to double in 2025 to 2 million tonnes — still only 0.7 percent of total industry fuel usage. 

The average cost of SAF in 2024 was 3.1 times higher than jet fuel, adding $1.6 billion in costs. 

In 2025, SAF is expected to cost 4.2 times more than jet fuel, primarily due to “compliance fees” levied by European fuel suppliers to hedge against the cost of meeting a 2 percent SAF mandate in jet fuel supplies. 

“The behavior of fuel suppliers in fulfilling the SAF mandates is an outrage. The cost of achieving net-zero carbon emissions by 2050 is estimated to be an enormous $4.7 trillion,” said Walsh. 

He added: “Fuel suppliers must stop profiteering on the limited SAF supplies available and ramp up production to meet the legitimate needs of their customers.” 

Walsh added that under the Carbon Offsetting and Reduction Scheme for International Aviation, airlines are expected to face a $1 billion cost in 2025. 

Under CORSIA, operators must purchase and cancel emissions units to offset increases in CO2 emissions. 

“CORSIA must be successful. It is a credible and verifiable system that requires carbon credits of only the highest standard, making its positive impact on climate unquestionable,” said Walsh. 

RIYADH: The global industrial sector is witnessing a radical transformation toward adopting Fourth Industrial Revolution technologies, prompting countries to reconsider traditional manufacturing methods and adopt smart solutions that include automation, artificial intelligence, robotics, and data-driven systems to improve production efficiency and reduce operational costs. 

According to the Saudi Press Agency, the Kingdom is not only keeping pace with the global industrial transformation but also aims to lead it through strategic initiatives and specialized programs that promote smart industry practices and accelerate the adoption of advanced manufacturing technologies.

This will enhance the competitiveness of ������Ƶ’s industrial sector both regionally and globally, aligning with the goals of Vision 2030 and the National Industrial Strategy to position the Kingdom as a leading industrial power, one that supports global supply chains and exports high-tech products globally.

The Ministry of Industry and Mineral Resources is undertaking this ambitious transformation by establishing an integrated and comprehensive national system to enhance advanced manufacturing, according to SPA. 

It has launched the Advanced Manufacturing and Production Center, which brings together all programs and initiatives that enable the adoption of modern manufacturing technologies and stimulate smart and innovative industrial solutions. 

This initiative is in cooperation with various government entities related to the technology, research, and innovation sectors and in partnership with several global leaders in industrial technology. 

The efforts under the Advanced Manufacturing and Production Center include the Future Factories Program Initiative, the Industrial Beacons Program, the Accelerated Manufacturing Program, the Capability Centers Network, and the Operational Excellence Program, reported SPA. 

These initiatives collectively support the center’s vision of becoming a unified national platform that accelerates the adoption of advanced manufacturing technologies. They also serve as a bridge to help local manufacturers access cutting-edge solutions that improve efficiency, enhance quality, and reduce costs across the industrial sector. 

The center aims to boost productivity and competitiveness in the manufacturing sector by localizing advanced and sustainable technologies, creating an attractive environment for industrial investment, and supporting skill development through its Capability Centers Network. It also offers experiential learning opportunities and provides advisory services to help industrial establishments adopt advanced manufacturing practices. 

The efforts of the ministry are aligned with several government entities that support the center’s vision and objectives.

In 2022, the ministry launched the Future Factories initiative to support the smart transformation journey of industrial establishments, aiming to automate 4,000 Saudi factories and increase their production efficiency, reduce reliance on unskilled labor, and promote the adoption of advanced industrial solutions and practices. 

The initiative offers numerous incentives and enablers to support the digital transformation of national factories, including financing solutions, consulting services, and the development and qualification of human resources to leverage the latest manufacturing technologies. 

It also helps industrial establishments assess their technological maturity and develop transformation plans to adopt operational excellence practices and advanced manufacturing solutions, including AI, robotics, the Internet of Things, and big data analytics. 

To support industrial transformation in the Kingdom and achieve global leadership in adopting advanced manufacturing technologies, the ministry launched the Industrial Beacons program. 

This undertaking aims to enable leading Saudi factories to adopt Fourth Industrial Revolution technologies, thereby enhancing their production efficiency and qualifying them to receive international recognition within the Global Lighthouse Network, an affiliate of the World Economic Forum, by 2030. 

During the launch ceremony of the Advanced Manufacturing and Production Center, the Ministry announced 10 national industrial companies that committed to achieving the standards of the Industrial Beacons initiative. 

With the launch of the Advanced Manufacturing and Production Center and its targeted initiatives to promote advanced technologies and foster research and innovation in the industrial sector, the Kingdom signals that its ambitions extend beyond simply keeping pace with global industrial trends.