Airlines: The outlook for airlines continues to improve following the pandemic shock but demand is stalling in 2025. In 2024, global air passenger traffic surged by +10.6% y/y, drove by a strong demand in key regions and robust growth in emerging economies, proving that traveling is no longer discretionary but has become a staple in people’s budgets. Airlines in APAC and Europe were the largest contributors to industry-wide passenger traffic growth, accounting for over 74% of the net increase in revenue passenger kilometers (RPK) for the year. This growth was driven primarily by an increase in international traffic in both regions and by significant expansion in the largest domestic markets of APAC, which was the last region to recover from the pandemic. In 2024, the total airline seat capacity across the industry, measured by available seat kilometers (ASK), increased by +8.8%. This growth was surpassed by the rise in passenger demand. Consequently, the passenger load factor (PLF) hit a record peak of 83.5% last year. However, global passenger growth has decelerated in 2025 compared with the peaks observed in the aftermath of the pandemic. Several factors explain this, such as the slowdown of the global economy, the persistent inflation in some countries, consumers’ lower confidence amid rising economic concerns and the geopolitical and trade tensions that also somewhat tourism. On the other hand, air cargo demand, measured in cargo tonne kilometers (CTK), grew by +11.3% in 2024, reaching an all-time high. The increase in air cargo demand spanned all regions. Yet, the monthly growth slowed, decreasing from double to single digits as the year progressed. APAC led air cargo demand, with a +14.6% increase in CTK, followed closely by the Middle East, at +13%, and by Latin America, at +12.8%. North America, saw a more modest growth in CTK at +6.5% y/y. Like passenger traffic, air cargo is also recording more modest growth in 2025.
There are four factors that will continue threatening airline margins in the short term: 1) higher wages, as personnel from pilots to ground airspace controllers have more bargaining power via strikes; 2) higher than pre-pandemic jet-fuel prices (which represent 30% of operational costs), and stricter requirements to adopt sustainable aviation fuels, which are even more expensive than conventional jet fuels; 3) higher ground charges such as airport fees, which have become particularly more expensive in Europe and 4) higher maintenance costs as the average fleet age continues to mount and demand for after-market services continues to soar because of the still-limited production capacity for brand new aircraft. Indeed, delivery rates of new planes continue to disappoint the market as the shortage of parts supplies disrupts production. The issues are expected to persist in 2025 and beyond. Only 1,266 aircraft were delivered in 2024, a -8.1% decline from 2023. For 2025, 1,692 aircraft are expected to be delivered globally (the highest level since 2019). Yet, this almost 26% lower than the estimates initially made a year ago (downward revisions have been occurring on a continuous basis). Globally, industry-wide revenues totaled nearly USD970bn (+6.2% y/y) in 2024, while airlines recorded net profits of USD32.4bn, with EBIT margins averaging 6.4%. For 2025, we expect revenues to grow only by +1.5% y/y given the recently observed deceleration in demand for air travel, with the global economy expected to grow by only +2.5% this year (from +2.8% in 2024).
Maritime: Disruptive events in recent years have underscored the vulnerability of global trade to maritime chokepoints, including the still ongoing Red Sea crisis, which is impeding transit through the Suez Canal; the severe drought-induced restrictions at the Panama Canal in 2023 and 2024 and the recent tensions in Iran reducing traffic flow at the Strait of Hormuz. As a result, so far in 2025, containership traffic through the Suez Canal remains -76% below the usual level with no signs of recovery. Conversely, sea traffic over the Cape of Good Hope (the southern tip of South Africa) is still +268% above 2023’s level. This shift has contributed to rising shipping costs due to increased fuel consumption, extended transit times and higher insurance premiums. Furthermore, the diversion has placed additional pressure on global supply chains and led to the emergence of alternative logistics strategies, including increased demand for air freight and expanded use of overland transport corridors. In an increasingly uncertain geopolitical landscape, other maritime chokepoints may come under greater scrutiny. Roughly 30% of the world’s seaborne oil transits hrough the Strait of Hormuz, for instance, which is also currently blocked, complicating oil trade and threatening oil supply to big oil importing nations such as China. Besides, the Strait of Malacca handles 25–30% of global trade, and an estimated 40% of the world’s containerships pass through the Taiwan Strait, all areas where rising tensions could present new risks to supply-chain continuity.
US shipping patterns are shifting amid trade policy uncertainty. Across the US, smaller and secondary ports are experiencing reduced trade volumes as shippers prioritize larger ports like Los Angeles (+15% increase in handled volume since "Liberation Day") to expedite deliveries ahead of August tariff deadlines. This shift has led to decreased container traffic and scheduled services at ports such as Oakland, Jacksonville and New Orleans. This increase in big seaports on the West coast reflects frontloading rather than sustained growth. Uncertainty over the Trump administration's trade policies remains high and while some sectors anticipate increasing inventories, others are still in "wait and see" mode.
Amid ongoing geopolitical uncertainty and tariff speculation, shipping costs, especially for containers, remain volatile. While average prices (World Composite Container Index) have surged by +17% since “Liberation Day”, they have receded by -32.8% since the start of 2025, being now (August 2025) at around USD2,517 per forty-foot container (FEU), with Shanghai to New York currently the most expensive route at USD4,210 per FEU.
Global warming will continue to be a risk factor for the maritime industry. While in some areas droughts are intensifying (making the passage of vessels difficult, as seen in the Panama Canal and in some navigable rivers in Europe, for example), in other areas there are floods that prevent passage under bridges near ports or that simply disrupt the logistics of certain low-lying seaports.
The challenge of greening an aging fleet: Although shipping currently accounts for only around 3% of global greenhouse-gas emissions, this share could rise to 17% by mid-century if decisive action is not taken. Decarbonization presents both a significant challenge and a market opportunity, as companies leading in fleet greening are poised to benefit from increasing demand for clean transportation and carbon pricing advantages. Currently, 15 of the world’s 30 largest shipping firms have set net-zero targets by 2050, driving continued growth in sector capital expenditures. However, achieving climate goals will require sustained investment of at least USD23bn annually. At the same time, the global fleet faces aging concerns, with an average vessel age of 22 years, nearing the typical 25-30 lifespan. Over half of the fleet exceeds 15 years in age, and least developed countries (and small islands) tend to own the oldest ships while lacking the needed resources to accelerate greening efforts.
Rail: Europe is home to one of the world’s most advanced rail networks, thanks to its compact geography, seamless cross-border travel within the Schengen Area and decades of significant public investment. Traditionally dominated by state-owned operators, such as SNCF (France), Deutsche Bahn (Germany) and Trenitalia (Italy), the sector has long been central to national mobility strategies. In 2021, the EU implemented the Fourth Railway Package, a major step toward liberalizing the long-distance passenger rail market. This reform is now allowing private and foreign operators to compete alongside national incumbents, with the goal of boosting service quality, innovation and efficiency across the continent, with regional demand expected to continue rising as people become more aware of their carbon footprint. Indeed, the liberalization aligns with broader EU climate goals as rail is among the most sustainable modes of transport. Investments in high-speed corridors and cross-border projects like Rail Baltica and the Trans-European Transport Network (TEN-T) aim to enhance connectivity and shift more travelers from road and air to rail.
While Europe places strong emphasis on rail as a mode of passenger transport, other major economies such as the US, China, India and Japan also rely heavily on rail, but with differing priorities and characteristics. In the US, the rail network is predominantly freight-oriented. It is one of the largest and most efficient cargo rail systems in the world, playing a vital role in the movement of goods across vast distances. Passenger rail, by contrast, remains limited outside a few corridors, such as the Northeast Corridor served by Amtrak. China has invested heavily in both freight and high-speed passenger rail. It now operates the world's largest high-speed rail network, covering over 40,000 kilometers, and has transformed domestic travel with affordable, efficient service between major cities. At the same time, China’s conventional rail lines continue to support one of the world’s busiest freight systems. India, with one of the oldest and most extensive rail networks globally, primarily uses its system for long-distance passenger travel and essential freight movement. Indian Railways serves millions of passengers daily, although challenges remain in terms of modernization and congestion. Japan is renowned for its pioneering high-speed rail system (the Shinkansen) which has set global standards for punctuality, safety and efficiency in passenger transport. While freight plays a more modest role in Japan’s rail sector, the country has long demonstrated how advanced rail infrastructure can drive urban development and regional connectivity.
Road: The 2020–2022 global health crisis significantly disrupted public investment in road and transport infrastructure, particularly in developing regions such as Asia, Latin America and Africa. In these areas, insufficient infrastructure has long been a structural barrier to the sector’s growth, and the pandemic further delayed essential upgrades and expansions. The lack of sustained investment in roads, logistics corridors and urban mobility systems continues to limit connectivity, regional integration and access to markets. In contrast, developed economies, most notably the US and Europe, used infrastructure spending as a tool for economic recovery during the crisis. Governments launched or accelerated large-scale road and transport projects, aiming to stimulate job creation, enhance competitiveness and transition toward more sustainable mobility systems. In Europe, one of the flagship initiatives is the TEN-T, a strategic program aimed at improving cross-border mobility and harmonizing infrastructure standards across the EU. The network plans to connect 424 major cities with high-capacity transport links, including roads, rail and multimodal hubs, and mandates a minimum operational speed of 160 km/h for passenger transport on core corridors. Full implementation is targeted for 2040, with intermediary milestones set for 2030.
For intercity road transport operators, especially those managing bus and coach fleets, the shift toward electrification presents both opportunities and challenges. Europe is currently the most advanced region in terms of financing mechanisms, regulatory support and incentives for fleet decarbonization. However, one major barrier remains: the insufficient deployment of charging infrastructure. To enable a large-scale transition from diesel to electric vehicles, substantial investment is still needed in both highway and urban charging networks. Globally, the outlook for road transportation hinges on a combination of public policy, private investment and technological readiness. While advanced economies are moving steadily toward decarbonization and digital infrastructure integration, many emerging markets remain focused on basic road access, rural connectivity and the rehabilitation of aging networks.
