The cost of air travel has dropped by 40% in real terms over the past decade, according to Willie Walsh, Director General of the International Air Transport Association (IATA). Speaking at the IATA Annual General Meeting (AGM) and World Air Transport Summit held in New Delhi from June 1 to 3, Walsh emphasised the importance of cost-benefit analysis in aviation regulation and highlighted ongoing industry challenges.
This year’s AGM marked a historic return to India after 42 years, with the last such event hosted in the country in 1983. Organised in partnership with IndiGo, the event brought together approximately 1,700 delegates, including global airline leaders, government officials, and industry experts.
In his keynote address, Prime Minister Narendra Modi said India is emerging as a leader in the convergence of space and aviation technologies. “India’s civil aviation sector has undergone major transformation in the past decade,” he said. Modi described the summit as a platform to advance not only aviation but also global cooperation, climate goals, and equitable growth. “As speed increases, distant destinations are becoming our destiny,” he added.
Airline Profits, Taxation, and Market Growth
IATA projected that global airline industry profits will reach $36 billion in 2025, up from $32.4 billion in 2024. However, this estimate is slightly below the $36.6 billion forecast made in December 2024. Total industry revenue is expected to rise to $979 billion in 2025, reflecting a modest 1.3% year-on-year increase.
Walsh highlighted the aviation sector’s resilience despite inflationary and regulatory pressures. He pointed to ongoing supply chain challenges, noting a backlog of 17,000 aircraft and over 1,100 aircraft under 10 years old currently in storage. The global fleet replacement rate remains at 3%.
In India, IATA raised concerns about the country’s complex tax regime, calling for greater clarity for foreign and domestic carriers. This comes amid recent tax notices issued to international airlines. Walsh warned that poor regulatory decisions often stem from insufficient economic scrutiny. “The litmus test for any regulation is cost–benefit analysis,” he said. “Regulators are not playing with their own money, and the difference between political success and solving a problem is often wide. That makes bad regulation far too prevalent.”
Despite these concerns, IATA expects India’s aviation market to grow faster than China’s in the coming years, driven by fleet expansion and rising passenger demand. The sector currently employs 369,700 people and contributes $5.6 billion to the country’s GDP.
Trade Disputes and Global Trends
Walsh also stressed that airspace should not be used as a tool in trade disputes, warning against the politicisation of air routes. This follows a global trend of increasing fragmentation in international aviation agreements, especially in times of geopolitical tension.
Air cargo was another area of focus during the summit, as airlines continue to rely on cargo operations to support overall profitability in a post-pandemic world. Supply chain bottlenecks and fleet availability remain key issues, with stakeholders calling for greater cooperation between governments and the aviation industry.
Looking Ahead
As the industry looks to balance growth with sustainability and operational resilience, the IATA AGM underscored the need for coherent policy frameworks, infrastructure investment, and global collaboration.
It was also announced that the next IATA AGM in 2026 will be hosted in Brazil.
