Optimism that the aviation sector is “booming” is being dampened by fears about the impact of Donald Trump’s second term in office, the UATP airline distribution summit was told.

Taking the temperature of the state of the industry, Richard Maslen head of analysis for CAPA Centre for Aviation, painted a rosy picture of the industry overall.

But he said signs of softening confidence in the US and in the air cargo market are reasons to be cautious about prospects for the sector alongside ongoing capacity constraints.

“We are seeing a business-as-usual start to 2025. We entered the year quite positively,” said Maslen although he added that a more cautious view was now starting to creep in.

“It’s something we have to be mindful of. We are not quote as comfortable as we thought. A shift in US confidence could have a big impact over the rest of the year.

“Airlines are going to be profitable this year, but we do not know what’s round the corner as an industry as we have to be prepared for what the next big event is going to be.”

Latest IATA figures for January have shown that revenue per passenger kilometre flown in January was up 10% on the back of a strong 2024.

Globally UN figures show the travel and tourism sector, which was forecast to experience a decade of “amazing growth” in the 2020s is back to where it was pre pandemic and worth £33 trillion in 2024.

Maslen said the key factor for aviation was the high load factors of 82.1% driven by constrained aircraft deliveries. Airport body ACI World predicts the sector will grow to $17.7 passengers billion by 2043.

However, pointed to a “cooling off” in the freight market. “We see cargo as a good barometer for the general state of the industry,” he said.

“And we are seeing a cooling off. That raises a few concerns going forward. Maybe things are not quite as positive as we think they are.”

Following a strong year for airlines in the US, Maslen said this was starting to change. He said Trump is the biggest threat to airlines in 2025.

“There is so much more uncertainty. It’s going to be an issue that airlines are looking at currently. We see sentiment turning down slightly, particularly in the US market.

“It’s at the early stage of that, but it’s something we’re going to have to watch closely.”

The Trump second term offers a potential opportunity for Europe to capitalise on the returning Chinese traveller, Maslen said.

Another area of potential uncertainty is fuel prices which have been stable for a long time but “again, it’s something that can quickly change,” warned Maslen.

Alarm bells are also being heard around sustainability with voices now starting to concede that ambitious net zero targets are not gong to be hit.

Maslen said IATA estimates that the transition to net zero will cost the industry $128 million annually.

“People are starting to say now I do not think we are going to hit this target. Wille Walsh [IATA director general] is starting to say we are going to have to revisit these numbers.

“This will raise alarm bells in the industry. Governments are quite strong in terms if making sure boxes are ticked. Aviation is a great way for them to raise a lot of money.

“We have to be careful because we are under the spotlight more. This is an area where we are going to have a lot of conversations over the coming years.

“Airlines are going to have to take more control because governments will impose on them and if governments impose on them it’s not going to be good for anybody.”