With aviation generating around 2% of global emissions, governments have a ‘strong role to play’ in encouraging the sector’s transition to net zero, Avolon has said.
The global aviation finance company, which works with 140 airlines in 59 countries, cited IATA data that suggested that some $4.7 trillion will be needed to fund the sector’s transition to a net zero template.
National governments, it added, need to set ‘coordinated global policies that attract private investment both in sustainable aviation fuel production, and transformative new technologies such as hydrogen and electric-powered flight’.
“Aviation’s net zero challenge will also require global policy coordination to stimulate investment, but mitigating emissions remains a key industry priority,” commented Jim Morrison, chief risk officer at Avolon.
Global airline revenue
According to Avolon, global airline revenue is expected to surpass $1 trillion for the first time in 2025, with significant contributions from the Asia-Pacific region.
The sector is also expected to post a 16% rise in net profit, to over $36 billion, marking the third consecutive year of growth. This follows on from a reduction in oil prices in 2024, which helped offset rising maintenance and labour costs.
“While the higher demand for air travel is evident, we are also entering a low visibility operating environment,” Morrisons added. “There are uncertainties around what political changes will mean for trade and growth, but the structural fundamentals of the industry remain favourable.”
Securing new aircraft will likely remain a challenge, with many new slots already sold out beyond 2030, meaning airlines are extending lease contracts and increasing the service life of their existing fleets.
Elsewhere, the aircraft manufacturing industry also faces challenges in meeting production targets, despite a 20% increase in deliveries expected for 2025.
“The aviation outlook for 2025 is robust, reflecting continued growth in travel demand against a backdrop of structural under-supply of new aircraft,” added Andy Cronin, CEO of Avolon. Read more here.
