The airline industry faced significant payment costs in 2025, with global airlines incurring $24.5 billion to process $1.05 trillion in sales. This represents a 10.4% increase in total costs compared to 2023. In contrast, the overall growth in travel sales over the same period was 7.7%, rising from $977 billion in 2023. The increasing payment costs highlight the need for greater cost efficiency in the industry.
The average cost per transaction for airlines was $5 per passenger in 2025. This is particularly significant when compared to IATA's forecast that airlines will make a net profit of $4.50 per passenger in 2026. The disparity between payment costs and profit margins underscores the importance of addressing payment transaction costs. IATA's Interim Director General and CFO, Sandrine Le Borgne, emphasized that the airline industry is highly competitive, capital-intensive, and operates on low margins.
Le Borgne stated that the increasing payment transaction costs are unsustainable and require careful examination. Despite significant technological advances, the industry needs to explore solutions to bring efficiency to payments. IATA is working on several initiatives to address this issue, including introducing alternative, lower-cost forms of payment for passengers. This move aims to reduce payment costs and improve the overall financial sustainability of airlines.
The 2025 IATA Global Passenger Survey revealed that 29% of passengers prefer to use digital wallets, while 8% prefer local instant payment solutions. In response, IATA has developed solutions such as IATA Pay and IATA Financial Gateway (IFG). IATA Pay enables passengers to use local instant payment solutions and has been rolled out in 34 countries with 38 payment schemes. IFG is a platform that allows airlines and travel suppliers to manage payments across multiple sales channels.
IATA's solutions aim to provide airlines with more efficient payment processing and improve the passenger experience. IATA Pay and IFG help airlines meet changing passenger preferences for payment. By offering alternative payment methods, airlines can reduce payment costs and improve revenue. The solutions also enable airlines to manage payments across multiple sales channels and in various countries.
IATA's Transparency In Payments solution allows airlines to define their payment policy and framework within the IATA Billing & Settlement Plan (BSP). This enables airlines to make informed decisions about accepting agency cards or other cost-effective alternatives. By improving transparency on the cost of agency cards, airlines can optimize their payment processing and reduce costs.
Providing passengers with alternative payment methods could also have a revenue-generating impact, according to IATA research. About one in five ancillary purchase attempts are not completed due to refused initial payment attempts and a lack of alternative payment options. By enabling more payment options, airlines may be able to realize some of this lost revenue and improve their financial performance.
Key points
- Airlines globally incurred $24.5 billion in payment costs in 2025.
- The average cost per transaction for airlines was $5 per passenger in 2025.
- IATA is exploring solutions to bring efficiency to payments, including alternative, lower-cost forms of payment for passengers.
