Payments Cost Airlines $24.5bn in 2025

Macao – The International Air Transport Association (IATA) has released new data demonstrating the rising cost burden of payment processing.

• Airlines globally incurred $24.5 billion in payment costs to process $1.05 trillion in sales in 2025, a 10.4% increase in total costs versus 2023. That far exceeds the overall growth in travel sales over the same period, which was up 7.7% from $977 billion in 2023.
• The average cost per transaction was $5 per passenger. In comparison, IATA forecasts that airlines will make a net profit of $4.50 per passenger in 2026.

“The airline industry is hyper competitive, capital intensive and famously low margin. 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,” said Sandrine Le Borgne, IATA’s Interim Director General and CFO.

Further analysis of the $24.5 billion cost of payments in 2025 revealed that:

• $20.7 billion (84.5% of the total) was related to payment fees or the direct cost of completing each transaction.
• $2.9 billion (11.8% of the total) was related to airline operating costs, including various payment systems, delayed cashflow, staff, and compliance.
• $0.9 billion (3.7% of the total) was lost due to fraud or uncollected sales.
• Cards accounted for the highest cost per transaction with average payment fees at 2.53%, higher than the estimated overall average of 1.97%. The lowest-cost payment options were at 0.01%.

IATA is exploring several solutions and guidance that will bring efficiency to payments to airlines including:

• Introduce alternative, lower-cost forms of payment for passengers. The 2025 IATA Global Passenger Survey revealed that 29% of passengers prefer to use a digital wallet and 8% prefer a local instant payment solution.
  
  IATA Pay and IATA Financial Gateway (IFG) help airlines meet the challenges of changing passenger preferences for payment. 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.

• Improve transparency on the cost of agency cards. Transparency In Payments is a solution that allows airlines to define their payment policy and framework within the IATA Billing & Settlement Plan (BSP). This enables airlines to take informed decisions on whether to accept an agency card as an alternative to a customer card or other cost-effective alternatives available through the BSP such as IATA EASY PAY.
• Make corporate travel more cost-efficient. Taking the opportunity presented by the industry move to Offers & Orders, IATA is working with airlines and corporate customers to develop a new approach to corporate travel payments, designed to improve payment efficiency, simplify reconciliation, and provide richer data, while giving airlines and their corporate customers greater choice in how payments are managed.
• Help airlines evaluate their payment options. IATA has developed the new Airline Payment Framework – Management Foundation, a framework that will assist airlines in aligning commercial, financial, and operational priorities to ensure that payments support both customer experience and financial performance needs. 

“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,” said Le Borgne.

For more information, please contact:

Corporate Communications

Tel: +41 22 770 2967

Email: corpcomms@iata.org