Report: Asia-Pacific to drive global airline revenue over $1 trillion

Avolon’s 2025 Outlook: Fast Forward paper forecasts that more seats will be added to schedules in Asia-Pacific than all other regions combined in 2025.

This comes as airlines’ growth slows in the US and Europe.

Lower oil prices in 2024 helped to more than offset a 19% increase in maintenance costs and 8% rise in labour costs, it says.

In 2025, Avolon projects a 16% increase in the sector’s net profit to over US$36 billion for the year.

However, securing enough aircraft for expansion and fleet replacement will continue to be a major challenge.

Airlines are adapting to this through lease extensions and extending the life of their existing fleet.

As a result, lease rates have risen as much as 50% in the past two years.

Key trends

Airlines: A third year of profitable growth in 2025 is set to help airlines recoup losses in 2020 and 2021. The markets that were first to recover – North America and Europe – are still growing, but at a slower pace, while Asia-Pacific gains momentum.

Manufacturers: Having declined in 2024, new deliveries will increase by c.20% in 2025 with over 1,400 aircraft to be delivered. Despite increasing deliveries, Airbus and Boeing will continue to struggle to hit their targets to ramp up production. Airbus and Boeing’s next production slots are not available until the 2030s, meaning airlines will continue to extend leases.

Lessors: Lessors now hold more new aircraft supply out to 2030 than Boeing and Airbus combined. Orderbooks have consolidated around a smaller number of lessors who will benefit from higher placement returns.

Innovation & Sustainability: Aviation generates US$3.5 trillion in global GDP, supports 88 million jobs, and accelerates social and economic development, but it also contributes c.2% of global emissions. Governments have a strong role to play in setting coordinated global policies that attract private investment both in sustainable aviation fuel production, and transformative new technologies.

Risks: Global economic growth is slowing from a peak of 6.6% GDP growth in 2021 to a steady 3.2% in 2025. Inflation is reducing towards central bank targets.

Andy Cronin, CEO of Avolon said:“The aviation outlook for 2025 is robust, reflecting continued growth in travel demand. Asia-Pacific will be the engine of that growth, and we anticipate global airline revenues will exceed the US$1 trillion mark for the first time.”

The paper was co-authored by Avolon’s Chief Risk Officer, Jim Morrison, and SVP Portfolio Strategy, Marc Tembleque.