Report: Payments Cost Airlines $24.5bn in 2025

Stories by Chinedu Eze

The International Air Transport Association (IATA) has released new data showing that airlines globally incurred $24.5 billion in payment costs to process $1.05 trillion in sales in 2025.

According to the global body, the new data has confirmed the rising cost burden of payment processing in airline ticketing purchase.

The aforementioned figure is a 10.4 per cent increase in total costs compared to 2023 and IATA said this far exceeds the overall growth in travel sales over the same period, which was up 7.7 per cent from $977 billion in 2023.

IATA noted that the average cost per transaction was $5 per passenger. In comparison, the Association forecasts that airlines will make a net profit of $4.50 per passenger in 2026.  

Giving further details, IATA’s Interim Director General and CFO, Sandrine Le Borgne, said: “The airline industry is hyper competitive, capital intensive and famously low margin (in profit). In such an environment every cost item needs to be looked at carefully. The fact that payment transaction costs are increasing faster than industry revenues is unsustainable and, despite significant technological advances, highlights the critical need for greater cost efficiency.”
Further analysis of the $24.5 billion cost of payments in 2025 revealed that $20.7 billion (84.5 per cent of the total) was related to payment fees or the direct cost of completing each transaction; $2.9 billion (11.8 per cent of the total) was related to airline operating costs, including various payment systems, delayed cashflow, staff, and compliance; $0.9 billion (3.7 per cent of the total) was lost due to fraud or uncollected sales and Cards accounted for the highest cost per transaction with average payment fees at 2.53 per cent, higher than the estimated overall average of 1.97 per cent. The lowest-cost payment options were at 0.01 per cent. 

IATA stated that it is exploring several solutions and guidance that will bring efficiency to payments to airlines including introducing alternative, lower-cost forms of payment for passengers. 

It disclosed that the 2025 IATA Global Passenger Survey revealed that 29 per cent of passengers prefer to use a digital wallet and eight per cent prefer a local instant payment solution. 

IATA is also looking at IATA Pay and IATA Financial Gateway (IFG), expressing optimism that these will help airlines meet the challenges of changing passenger preferences for payment.

The association explained that IATA Pay, which enables passengers to use local instant payment solutions to purchase travel, has been rolled out in 34 countries with 38 payment schemes. IFG is a platform that allows airlines and travel suppliers to manage, optimize, and control travel industry payments across multiple sales channels in more than 170 countries and using 300-plus payment methods. 

“In addition to cost-efficiency, IATA research shows that providing passengers with alternative payment methods could also have a revenue-generating impact. About one in five ancillary purchase attempts are not completed because the initial payment attempt was refused and no other method was offered. Enabling more payment options has the potential to help airlines realize some of this lost revenue,” Le Borgne further said.