Combined net profit hit US$12.1 billion, but rising fuel prices cloud outlook for carriers
[SINGAPORE] Asia-Pacific airlines’ combined operating revenue in 2025 climbed 4.3 per cent year on year to US$223.7 billion, driven by a surge in international and regional travel.
This was supported primarily by a 4.7 per cent rise in passenger revenue to US$178.4 billion, according to preliminary figures released on Thursday (Jul 16) by the Association of Asia Pacific Airlines (AAPA).
The overall growth came despite a 2.8 per cent slide in passenger yields to US$0.078 per revenue passenger-kilometre. A 7.7 per cent jump in system-wide passenger traffic more than made up for cheaper average ticket prices.
The top-line growth allowed the region’s carriers to book a combined net profit of US$12.1 billion for the year.
However, costs also rose, with combined operating expenses increasing by 4.3 per cent to US$209.4 billion.
On the cargo side, revenue increased 1.4 per cent to US$23.6 billion in 2025.
Air freight demand grew 3.5 per cent as shippers aggressively front-loaded cargo to get ahead of looming tariff hikes, helping airlines stabilise revenues even as cargo yields dipped 2 per cent to US$0.321 per freight tonne-kilometre.
Squeezed by non-fuel costs
Even with the healthy revenue expansion, airlines were forced to walk a tightrope on expenses.
Non-fuel expenditure rose 7.8 per cent to US$151.1 billion, driven by chronic supply chain disruptions, higher staff salaries, aircraft leasing rates and rising airport charges.
This came as fuel costs dropped 3.7 per cent to US$58.3 billion, thanks to a 9.5 per cent decline in global jet fuel prices, which averaged US$88.80 a barrel.
The drop in energy prices gave airlines breathing room, lowering fuel’s share of total operating costs by 2.3 percentage points to 27.8 per cent. That relief allowed carriers to lock in a 6.4 per cent operating margin for the year.
“Asia-Pacific airlines entered 2025 from a position of strength, with robust passenger and cargo demand supporting another year of profitable growth,” AAPA director-general Wong Hong said.
“Despite these headwinds, the region’s carriers maintained operating margins… reflecting continued operational discipline.”
Emerging headwinds
The industry group indicated that carriers’ revenue momentum would face stiffer tests in the months ahead as the reprieve from high energy costs disappears.
Wong noted that a sharp, recent reversal in jet fuel prices and broader macroeconomic volatility stemming from conflicts in the Middle East would push fuel expenditures back up this year.
The rising cost environment also risks denting consumer spending power and corporate travel budgets.
Despite the caution, AAPA expects demand to hold firm in the near term, anchored by a projected 4.4 per cent economic expansion across the Asia-Pacific this year.
