Written by AP Business Writer Daniel J. Troise
NEW YORK (AP) Despite potential capacity concerns, airlines anticipate a robust tailwind from travel demand in 2025.
Strong predictions for the year have been provided to investors by United Airlines, Delta Air Lines, and a number of other American airlines. Major airlines should see more revenue and profits in 2025, according to Wall Street. Those predictions have also improved due to lower jet fuel prices.
According to Ed Bastian, CEO of Delta Air Lines, the airline is already on course for its greatest fiscal year ever.
After the airline’s most recent quarterly profits report, he stated that American consumers are financially sound and yet place a high value on experiences.
In 2024, consumer spending on the majority of goods and services stayed high. According to the data on personal consumption expenditures, one of the strongest categories was air travel, with spending rising monthly through November.
With United Airlines’ stock more than doubling and Delta’s shares jumping 50%, airlines were among the greatest winners on Wall Street in 2024. Along with predictions for profit growth, the majority of airline stocks have continued to rise until 2025.
However, supply chain issues with restricted capacity continue to plague the business.
As airlines deal with the aftermath from maintenance, repair, and overhaul concerns as well as manufacturing delays from major aircraft manufacturers, the capacity challenges of 2024 will persist into 2025 and even into 2026, according to John Grant, chief analyst at travel data company OAG.
There are widespread supply chain delays for parts for airlines and aircraft manufacturers. Boeing continues to be a major drag on the industry. The struggling aircraft manufacturer reported that it suffered charges totaling around $3 billion in the fourth quarter of 2024 and that it is still experiencing manufacturing problems. The machinists’ strike caused production to stop at a number of its locations.
Those supply constraints restrained capacity expansion in 2024 and will do so again in 2025, the International Air Transport Association, or IATA, said. According to the agency, passenger capacity will increase by 7.5% globally and by 2.8% in North America by 2025. That would indicate that the decline from 2024 has continued.
According to an IATA prediction for 2025, this is reducing development prospects and raising costs in a number of areas, such as aircraft leasing and maintenance.
Growth in passenger traffic has been hindered by slowed capacity expansion. In 2025, the IATA projects 8% global growth, with 3% growth in North America.
Nevertheless, that rise is sufficient to support major airlines’ predictions. In 2025, Wall Street projects a 23% increase in Delta’s profits. Analysts predict that American Airlines’ profit would increase by 23% and United Airlines’ profit will increase by roughly 24%.
Under President Donald Trump, the U.S. sector may also experience more lenient regulations. This can entail less stringent regulations for disclosures of travel fees and fines for delayed flights.