Airline Payment Costs Reach $24.5 Billion as IATA Pushes for Cheaper Ways to Pay

The average payment cost was $5 per passenger, exceeding the $4.50 net profit per passenger that IATA forecasts airlines will earn in 2026.

Airlines spent $24.5 billion processing $1.05 trillion in sales during 2025, with new International Air Transport Association (IATA) data showing payment costs growing faster than travel sales. Total payment costs rose 10.4% compared with 2023, exceeding the 7.7% increase in sales from $977 billion over the same period. The figures highlight the pressure that collecting payments places on an industry operating with narrow profit margins.

The average payment cost was $5 per passenger, exceeding the $4.50 net profit per passenger that IATA forecasts airlines will earn in 2026. That comparison shows how payment expenses can absorb an amount greater than the earnings airlines expect to retain from each traveler. For a highly competitive business with substantial investment needs, reducing those expenses could make a meaningful difference to financial performance.

Sandrine Le Borgne, IATA's Interim Director General and CFO, described payment costs rising faster than industry revenues as unsustainable. She called for greater efficiency despite the technological advances already reshaping how passengers buy travel. IATA is pursuing cheaper payment choices, clearer information about agency cards and changes to corporate travel payments to help airlines manage the burden.

Transaction Fees Account for Most Payment Spending

Direct payment fees accounted for $20.7 billion, or 84.5%, of the industry's total payment costs in 2025. Airline operating expenses added $2.9 billion, representing 11.8%, covering payment systems, delayed cash flow, staffing and compliance. Fraud and uncollected sales accounted for another $0.9 billion, equivalent to 3.7% of the total.

Cards carried the highest average payment fees at 2.53%, exceeding the estimated overall average of 1.97% across payment methods. The lowest-cost options had fees of just 0.01%, illustrating the substantial differences airlines face when accepting different forms of payment. Those differences make the mix of payment options an important consideration for airlines seeking to protect their margins.

More Payment Choices Could Cut Costs and Recover Sales

Passenger preferences provide an opportunity to expand alternatives, with the 2025 IATA Global Passenger Survey finding that 29% prefer digital wallets and 8% favor local instant payment solutions. IATA Pay enables travelers to purchase flights through local instant payment services and has been introduced in 34 countries across 38 payment schemes. The IATA Financial Gateway helps airlines and travel suppliers manage, optimize and control payments across multiple sales channels, supporting more than 300 payment methods in over 170 countries.

Offering another way to pay could also help airlines complete purchases that would otherwise be abandoned after a declined transaction. IATA research found that about one in five ancillary purchase attempts are not completed because the first payment attempt is refused and no alternative method is offered. Le Borgne said broader payment choice could help airlines recover some of that lost revenue, giving the industry a commercial reason to expand options alongside potential cost savings.

Clearer Policies and Corporate Payment Changes Take Shape

IATA's Transparency In Payments solution lets airlines define their payment policies and acceptance framework within the Billing & Settlement Plan, giving them clearer grounds for decisions about agency cards. Airlines can use that information to assess whether to accept an agency card instead of a customer card or another cost-effective option available through the system. IATA EASY PAY is among the alternatives available through the Billing & Settlement Plan.

The industry's move to Offers & Orders is creating an opportunity to rethink corporate travel payments, with IATA working alongside airlines and corporate customers on a new approach. The work is designed to improve payment efficiency, simplify reconciliation and provide richer data, giving both sides greater choice in managing payments. IATA has also developed the Airline Payment Framework – Management Foundation to help airlines align commercial, financial and operational priorities so that payment decisions support customer experience and financial performance.