The International Air Transport Association (IATA) has reported that global airlines spent US$24.5 billion processing payments in 2025, highlighting the growing financial pressure on an industry operating with narrow profit margins. Airlines processed approximately US$1.05 trillion in sales during the year, while total payment related costs increased faster than travel sales.
The figures show that payment expenses rose by 10.4% compared with 2023, while travel sales increased by 7.7% over the same period. Sandrine Le Borgne, IATA’s Interim Director General and Chief Financial Officer, warned that the rising cost of payment transactions presents a significant challenge for airlines and underscores the need for greater cost efficiency.
Payment Expenses Outpace Airline Sales Growth
According to IATA, airlines spent an average of US$5 per passenger on payment transactions in 2025. This is higher than the association’s forecast net profit of US$4.50 per passenger for 2026, illustrating how payment processing expenses can place considerable pressure on airline profitability.
The report identified three major components of the US$24.5 billion total. Payment fees accounted for US$20.7 billion, or 84.5% of the total, while airline operating expenses associated with payment systems, delayed cash flow, staffing and compliance represented US$2.9 billion. A further US$900 million was attributed to fraud and uncollected sales.
Card Payments Remain a Major Cost Burden
Payment cards represented the most expensive payment method identified in IATA’s analysis, with average payment fees of 2.53%, compared with an estimated overall average of 1.97%. By contrast, the lowest-cost payment options carried fees as low as 0.01%, demonstrating the potential financial benefits of offering more affordable alternatives.
IATA is encouraging airlines to examine their payment systems and improve cost transparency, particularly when evaluating agency cards and other transaction methods. Its Transparency in Payments initiative allows airlines to establish payment policies within the Billing and Settlement Plan framework, helping them make more informed decisions about which payment options to accept.
Digital Wallets and Alternative Payments Offer Opportunities
Changing passenger preferences are creating opportunities for airlines to reduce payment expenses through alternative methods. IATA’s 2025 Global Passenger Survey found that 29% of passengers preferred digital wallets, while 8% preferred local instant payment solutions. These options could provide alternatives to more expensive card transactions.
IATA Pay, which supports local instant payment solutions, has expanded to 34 countries with 38 payment schemes. Its Financial Gateway platform also enables airlines and travel suppliers to manage payments across more than 170 countries and over 300 payment methods, helping businesses coordinate transactions across different sales channels.
IATA Pushes for More Efficient Airline Payment Systems
IATA is also working with airlines and corporate customers to develop more efficient corporate travel payment processes. The initiative aims to simplify reconciliation, improve the quality of payment data and give airlines and corporate clients greater flexibility in managing transactions as the industry moves towards modern Offers and Orders systems.
The association also highlighted the potential revenue benefits of offering passengers more payment choices. Its research indicates that around one in five attempts to purchase additional travel services are not completed when an initial payment is declined and no alternative method is available. By improving payment efficiency and offering suitable alternatives, airlines could reduce costs while recovering some otherwise lost sales.
