Airline payment costs rose to $24.5 billion in 2025 as carriers worldwide processed $1.05 trillion in sales, according to new data from the International Air Transport Association (IATA).
Total costs were up 10.4% on 2023, compared with 7.7% growth in travel sales, which stood at $977 billion two years earlier. Card fees are the largest single driver.
The average cost per transaction was $5 per passenger. IATA forecasts that airlines will make a net profit of $4.50 per passenger in 2026, meaning payment processing costs now exceed the industry’s expected per-passenger margin.
Of the $24.5 billion total, $20.7 billion (84.5%) related to payment fees, the direct cost of completing each transaction. A further $2.9 billion (11.8%) came from airline operating costs, including payment systems, delayed cashflow, staff and compliance. Fraud and uncollected sales accounted for $0.9 billion (3.7%).
Cards carried the highest cost per transaction, with average payment fees of 2.53%, against an estimated overall average of 1.97%. The lowest-cost payment options ran at 0.01%.
“The airline industry is hyper competitive, capital intensive and famously low margin. In such an environment every cost item needs to be looked at carefully. 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, interim director general and chief financial officer of IATA.
IATA research also points to lost ancillary revenue linked to payment acceptance.
Around one in five ancillary purchase attempts fails because the initial payment is refused and no alternative method is offered.
“In addition to cost-efficiency, IATA research shows that providing passengers with alternative payment methods could also have a revenue-generating impact. About one in five ancillary purchase attempts are not completed because the initial payment attempt was refused and no other method was offered. Enabling more payment options has the potential to help airlines realize some of this lost revenue,” said Le Borgne.
To reduce airline payment costs, IATA is promoting lower-cost payment methods.
Its 2025 Global Passenger Survey found that 29% of passengers prefer a digital wallet and 8% prefer a local instant payment solution.
IATA Pay, which allows passengers to buy travel using local instant payment solutions, has been rolled out in 34 countries across 38 payment schemes.
The IATA Financial Gateway (IFG) lets airlines and travel suppliers manage and optimise payments across multiple sales channels in more than 170 countries, using more than 300 payment methods.
The association is also targeting the cost of agency cards.
Its Transparency In Payments solution allows airlines to set their payment policy within the IATA Billing & Settlement Plan (BSP), enabling them to decide whether to accept an agency card in place of a customer card or lower-cost BSP alternatives such as IATA EASY PAY.
On corporate travel, IATA is working with airlines and corporate customers to develop a new payment approach linked to the industry move to Offers & Orders.
The model is intended to improve payment efficiency, simplify reconciliation and provide richer data.
IATA has also launched the Airline Payment Framework – Management Foundation, designed to help airlines align commercial, financial and operational priorities when evaluating payment options and managing airline payment costs.
