Airlines worldwide faced $24.5 billion in payment processing costs in 2025, as transaction expenses continued to grow faster than sales, according to the International Air Transport Association (IATA).
The costs were incurred against total airline sales of $1.05 trillion, marking a 10.4% increase in payment expenses compared with 2023. Sales rose by 7.7% over the same period, from $977 billion, IATA said.
Average payment processing costs reached $5 per passenger, exceeding the $4.50 net profit per passenger the association expects airlines to earn in 2026.
Sandrine Le Borgne, IATA’s interim director general and chief financial officer, said rising transaction expenses were a growing concern for an industry operating on narrow margins. She called for greater cost efficiency despite advances in payment technology.
Payment fees dominate airline expenses
Direct payment fees accounted for $20.7 billion, or 84.5% of total industry payment costs in 2025. A further $2.9 billion, representing 11.8%, covered operational expenses associated with payment systems, delayed cash flow, staffing and compliance.
Fraud and uncollected sales accounted for the remaining $900 million, or 3.7%.
The payment method also influenced costs. Card transactions carried an average fee of 2.53%, compared with an estimated industry-wide average of 1.97%. The least expensive payment options charged fees as low as 0.01%.
IATA encourages alternative payment methods
IATA is exploring ways to reduce transaction expenses by expanding access to lower-cost payment options. Its 2025 Global Passenger Survey found that 29% of respondents preferred digital wallets, while 8% favoured local instant payment services.
The association’s IATA Pay platform enables passengers to purchase travel using local instant payment systems. It is available in 34 countries and supports 38 payment schemes.
Meanwhile, the IATA Financial Gateway (IFG) helps airlines and travel suppliers manage payments across multiple sales channels. The platform operates in more than 170 countries and supports over 300 payment methods.
IATA is also working to improve transparency in agency card payments through its Transparency in Payments initiative. The system allows airlines to establish payment policies within the IATA Billing & Settlement Plan, helping them assess agency card transactions against customer card payments and alternatives such as IATA EASY PAY.
Corporate travel payment reforms
The association is collaborating with airlines and corporate clients on a new approach to business travel payments as the industry moves towards an Offers & Orders model. The initiative aims to simplify reconciliation, improve data quality and give airlines and corporate customers greater flexibility.
IATA has also introduced the Airline Payment Framework – Management Foundation to help airlines align commercial, financial and operational priorities when assessing payment options.
Beyond lowering costs, alternative payment methods could help carriers recover sales lost when transactions are declined. Le Borgne said IATA research indicated that about one in five attempts to purchase ancillary services was abandoned after an initial payment was refused and no alternative was available.
The findings highlight the growing importance of payment management as airlines seek to control expenses, protect profit margins and make purchasing easier for passengers.
Source: TradeArabia