Airlines paid $24.5bn in payment costs to process $1.05 trillion in sales in 2025, up 10.4% from 2023, the International Air Transport Association (IATA) said on October 27.
Payment costs are growing faster than the business they serve. Travel sales rose 7.7% from $977bn over the same two years, and processing now costs an average of $5 per passenger, against the $4.50 net profit per passenger IATA forecasts for airlines in 2026.
“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 chief financial officer.
Payment fees, the direct cost of completing each transaction, made up $20.7bn, or 84.5% of the total. Airline operating costs tied to payments, including systems, delayed cash flow, staff and compliance, accounted for $2.9bn. A further $0.9bn was lost to fraud or uncollected sales.
Cards were the most expensive way to pay, with average fees of 2.53% against an overall average of 1.97%. The cheapest options cost 0.01%.
IATA is pushing airlines towards lower-cost alternatives. Its 2025 Global Passenger Survey found 29% of passengers prefer to pay with a digital wallet and 8% with a local instant payment solution.
Its IATA Pay service, which lets passengers pay through local instant payment schemes, is live in 34 countries with 38 schemes. The IATA Financial Gateway lets airlines and travel suppliers manage payments in more than 170 countries and across more than 300 payment methods.
IATA is also offering airlines more visibility over the cost of agency cards through a Transparency In Payments tool within its Billing and Settlement Plan, and is working with airlines and corporate customers on a new corporate payments approach linked to the industry’s move to Offers and Orders.
Missed sales add to the cost. About one in five ancillary purchase attempts fail because the first payment is refused and no other method is offered, Le Borgne said.
IATA is the global trade association for airlines, representing some 350 carriers. It runs industry financial systems including the Billing and Settlement Plan used by travel agents to settle airline sales.
