Investor appetite for electric aviation has never been stronger. The capital flowing into eVTOL companies like Archer reflects a clear belief in the future of sustainable urban air mobility and a shift to greener transportation. To maintain this momentum in 2025, we need regulatory certainty, infrastructure investment and continued public-private collaboration across the world. The opportunity is massive and with the right policy and capital alignment, electric air taxis will redefine how people move in cities – sooner than most expect. Nikhil Goel, Chief Commercial Officer, Archer Aviation Despite significant investment, there are still technology challenges, risks and regulatory pressures affecting the progress of eVTOLs. Alongside the profile of the investor, these challenges will ultimately determine whether eVTOL start-ups could scale-up alongside other SAF, CDR or zero-emission propulsion technologies, at a time where investment in all these pathways is critically needed to remain on track to deliver net-zero aviation by 2050. Economic downturn, inflation and competing priorities While sustainability remains a key priority for the aviation industry, 2024 saw an increasing number of economic challenges affecting the sector’s focus on its net-zero agenda. The degree to which these affect decarbonization varies, but many of the executives surveyed and interviewed flagged a range of priorities they are grappling with that may limit their bandwidth or capital for decarbonization projects. Inflation, revenue and growth The International Monetary Fund expects global headline inflation to decrease to 4.2% in 2025, with global growth forecast to be at 3.3% for both 2025 and 2026.85 While inflationary pressures have been easing and overall concerns across the global economy are decreasing, according to the Forum’s Global Risks Report 2025, the global economic outlook remains a key worry for many of the aviation executives consulted.86 Facing adverse market conditions and some COVID-19 leftovers, several of the executives interviewed, in particular airport CEOs, mentioned economic profitability as a greater priority than sustainability. This point was particularly highlighted by executives from aviation hubs in emerging markets in Latin America, the Middle East and Southeast Asia. Passenger numbers, however, remain encouraging. Airports Council International (ACI) World estimates that 2019’s traffic levels were finally surpassed in 2024, with 9.5 billion passengers (104% of 2019).87 Asia Pacific and European carriers were the primary contributors to the net increase in traffic, while North American carriers experienced a significant rise in demand and other regions continued to see steady market expansion.The overall profitability of airlines is increasing according to IATA, with an expected combined net profit of $30.5 billion in 2024 and bullish growth forecasts to 2050, especially in emerging aviation markets such as China and India. While profit is going up, several stakeholders mentioned that costs are also increasing. On average, despite some volatility, jet fuel costs have remained fairly stable throughout 2024, but rising labour costs and workforce and supply chain bottlenecks, alongside regulatory uncertainty, have been mentioned as key areas of concern for executives. Some of these factors, together with demand, are combining to push airfares up, with an average year-on-year increase in US airfares of 8% in 2024.88 Despite this short-term increase, IATA reported that domestic airfares in the US, China and India were still close to or below 2015 levels, following an overall long-term downward trend, with more volatile ticket prices for international trips.89 Market commentators are expecting airfares to continue rising in 2025, potentially climbing by as much as 20% in the first half of the year.90 As a result, airlines’ revenues in 2025 are expected to surpass the $1 trillion milestone for the first time, with a forecast net profit of $36.6 billion – a record high for the industry. With airfares increasing, some of the airlines surveyed by Airports of Tomorrow were concerned about the prospect of passing on the additional cost of SAF to passengers, on top of any non-fuel- related price hikes. However, there was also greater acceptance that a SAF premium could work, if it were applied consistently and equally across carriers. In terms of market consolidation, last year saw a number of acquisitions and new partnerships aimed at growing and strengthening the financial position of the carriers involved. Alaska Airlines completed the purchase of Hawaiian Airlines, following a regulatory green light,91 while the sale of ITA Airways to Lufthansa Group was also finalized. This trend is expected to continue in 2025, with the Gol-Azul merger plan approved by the Brazil government.92 Some of the executives surveyed for this report consider consolidation and partnerships to be key strategies to boost financial profitability, in turn enabling future investment in new technology. However, they also highlighted how such discussions could temporarily pause carriers’ prioritization of the decarbonization agenda until the financial implications of mergers, consolidations, restructurings and acquisitions are completed. Global Aviation Sustainability Outlook 2025 31