Aviation Industry Lowers Outlook for This Year Amid Rising Trade Tensions

The aviation industry has revised its outlook for this year downward due to heightened trade tensions sparked by U.S. President Donald Trump, Bloomberg reported on June 2.

On this day, the International Air Transport Association (IATA) announced that the global airline industry is expected to post a total net profit of $36 billion (about 49 trillion won) this year. This is a slight downward revision from the $36.6 billion forecast announced at the end of last year.

AFP Yonhap News

IATA had initially projected that the industry’s annual revenue would surpass $1 trillion for the first time ever this year. However, in its latest announcement, it lowered the forecast to $979 billion. The industry’s net profit margin is expected to be 3.7%, an improvement over the previous estimate of 3.6%.

The total number of travelers this year is projected to reach 4.99 billion. While this marks an all-time high, it is a decrease from the previous forecast of 5.22 billion.

Recently, U.S. airlines have lowered their earnings forecasts one after another, as consumers reconsider travel plans due to the impact of tariffs and stricter immigration policies. Delta Air Lines, American Airlines, and Southwest Airlines withdrew their annual guidance in their April earnings announcements, citing a slowdown in demand and economic uncertainty. Bloomberg noted that this is a sharp reversal from the optimism at the beginning of the year, when stable demand was expected.

However, Ed Bastian, CEO of Delta Air Lines, said in a separate interview with Bloomberg Television that although the industry faced a difficult start to 2025 due to trade tensions and declining domestic travel demand in the U.S., he expects demand to improve in the latter part of the year.

Willie Walsh, Director General of IATA, stated, "The first half of 2025 has brought considerable uncertainty to the global market," but added, "Although the outlook is slightly lower than previous forecasts in several areas, including net profit, this year will still be better than last year."

However, Director General Walsh told Bloomberg Television that he remains optimistic, considering that the events hindering industry growth are short-term factors. He said, "They will not have a long-term impact on industry growth," and added, "Aviation demand will remain strong."

This content was produced with the assistance of AI translation services.