Global airlines incurred $24.5 billion in payment processing costs in 2025, highlighting the growing financial burden of transactions on an industry operating on tight profit margins, according to the International Air Transport Association (IATA).
The association said airlines spent the amount processing $1.05 trillion in sales during the year, representing a 10.4 per cent increase in payment-related costs compared with 2023. The rise outpaced the 7.7 per cent growth in travel sales over the same period, from $977 billion in 2023.
IATA estimated the average payment processing cost at $5 per passenger, exceeding its forecast net profit of $4.50 per passenger for the airline industry in 2026.
Sandrine Le Borgne, IATA’s Interim Director General and Chief Financial Officer, said the figures underscored the need for airlines to improve cost efficiency amid rising operational and financial pressures.
“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,” Le Borgne said.
She added that payment transaction costs growing faster than industry revenues were unsustainable, despite advances in technology, making greater efficiency in payment systems increasingly important.
An analysis of the expenditure showed that transaction fees accounted for the largest share, at $20.7 billion, representing 84.5 per cent of total payment costs. A further $2.9 billion, or 11.8 per cent, went towards operating expenses associated with payment systems, delayed cash flow, staffing and regulatory compliance.
Airlines also lost approximately $900 million, equivalent to 3.7 per cent of the total, through fraud and uncollected sales.
Card payments emerged as the most expensive transaction method, attracting average fees of 2.53 per cent, compared with the estimated overall average of 1.97 per cent. By contrast, some of the lowest-cost payment options carried fees of just 0.01 per cent.
In response to the rising costs, IATA is promoting alternative payment methods and financial technology solutions designed to help airlines reduce transaction expenses while accommodating changing passenger preferences.
The association cited findings from its 2025 Global Passenger Survey showing that 29 per cent of passengers preferred digital wallets, while eight per cent favoured local instant payment solutions.
Through IATA Pay, airlines can offer passengers local instant payment options when purchasing travel. The service has been introduced in 34 countries across 38 payment schemes. The IATA Financial Gateway, meanwhile, enables airlines and travel suppliers to manage and optimise payments across multiple sales channels, with support for more than 300 payment methods in over 170 countries.
IATA is also encouraging greater transparency in agency card payments through its Transparency in Payments solution, which allows airlines to establish payment policies within the association’s Billing and Settlement Plan. This gives carriers greater control over whether to accept agency cards or opt for potentially less expensive alternatives, including IATA EASY PAY.
Corporate travel payments are another area targeted for reform. As the industry transitions towards the Offers and Orders model, IATA is working with airlines and corporate customers to develop approaches intended to improve payment efficiency, simplify reconciliation and provide more detailed transaction data, while expanding payment choices.
The association has also introduced its Airline Payment Framework – Management Foundation to help carriers align commercial, financial and operational priorities when evaluating payment options.
Beyond reducing costs, IATA said expanding payment choices could help airlines recover revenue lost when transactions fail. Research by the association indicates that approximately one in five attempts to purchase ancillary services is abandoned because an initial payment is declined and no alternative method is offered.
Le Borgne said providing additional payment options could therefore improve both transaction efficiency and revenue generation by enabling passengers to complete purchases that might otherwise be lost.
The findings highlight an emerging financial challenge for airlines as digital transactions become increasingly central to ticket sales and ancillary revenue. With payment costs rising faster than travel sales, IATA is urging the industry to reassess its payment infrastructure and adopt more cost-effective solutions to protect profitability.
