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2025 Forecast: Air Passengers Will Seek Perks And Nostalgia

aircraft on tarmac
Credit: BeOnd

This year will likely be a fiercely competitive one for airlines wanting to attract new passengers or keep their loyal customers as traveler expectations and priorities evolve.

Travel technology company Amadeus’ Travel Trends for 2025 report, compiled in partnership with Globetrender, gives a glimpse into what it believes will be some of the ways travel expectations will change. This will mean airlines becoming better retailers and selling packages of products, Amadeus SVP airline solutions Cyril Tetaz said.

Personalization of the propositions made to passengers will become more widespread, the report predicts, with more suggestions popping up on individuals’ laptops or tablets of options they may wish to add to their basic flight ticket.

Interior
Delta Air Lines offers free Wi-Fi to SkyMiles members on most of its domestic flights. Credit: Delta Air Lines

There will also be changes inside the cabin, the report predicts. Whereas a few years ago there was a trend for passengers to pre-load their individual devices with films or other content, airlines are increasingly installing high-speed Wi-Fi with content provided via satellite services such as Starlink, which removes the need for pre-loaded tablets. And some premium carriers, such as Maldives-based BeOnd, are handing out virtual reality headsets in their all-business class aircraft.

Additionally, cabin systems such as Delta Sync are able—if a passenger is logged into the system as a member of the airline’s loyalty scheme—to remember the point in a film that the passenger has reached at the end of one journey and automatically offer to pick it up at the same point when they next fly with the airline.

These systems work best if a passenger is a loyalty member, something airlines are increasingly looking to advantage as travelers grow more relaxed at handing over large quantities of personal data in return for such conveniences.

Some of the benefits of increased digitization are, however, being constrained by legacy IT systems, which will need to be updated.

The report also sees a continuation of a trend that emerged last year, which is the segmentation of business class, where passengers can buy a “no frills” business ticket with the option to purchase add-ons, the way economy-class passengers or those on LCCs purchase ancillaries.

Essentially, the no-frills business class ticket gives a passenger more space and a better seat but little else, unless other perks are purchased. “It’s a way of slightly democratizing [business class], making it slightly more accessible for people,” Globetrender CEO Jenny Southan said.

Will these developments mean more costs for airlines? “It remains a very competitive environment; I don’t think you can jump to that conclusion,” Tetaz said.

The Travel Trends 2025 report lists several other categories of travel that are coming to the fore:

  • New heydays: Nostalgia-driven vacations that recreate happy past experiences.
  • Personalized flying: Advances in AI, 5G mobile connectivity and virtual reality will create highly personalized, connected and immersive experiences for passengers.
  • Connections in real life: Travelers jaded with online dating will increasingly see travel as a way to create or develop relationships in person.

“For consumers themselves, who are under pressure to keep finding joy in a volatile world, it is no surprise to see people looking to the ‘good old days’ when life was simpler, and turning to traditional means of making human connections, in spite of the ascent of artificial intelligence and other sci-fi technology,” Southan said.

LEASING TRENDS

"When I started the aircraft leasing business, it was unheard of. Most of the banks and financial institutions that we approached shut the door in my face,” Air Lease Corp. (ALC) founder and executive chairman Steve Udvar-Házy points out.

“They said, ‘This will never work. Airlines want to own airplanes. They don’t want to rent aircraft.’”

In 1980, roughly 2.4% of all commercial jet aircraft were leased. This grew to 17% by 1990, 27% in 2000 and 40% in 2010, reaching more than 50% in 2023.

“I don’t think this trend will continue at this rate,” Udvar-Házy said, “I think it’s going to start stabilizing, because as airlines develop ways to achieve greater profitability and strengthen their balance sheets, they’ll be able to purchase aircraft.”

However, Udvar-Házy still sees opportunities for lessors. “Remember that our cost of capital—as an investment grade $50 billion company—is much lower than 99% of the airlines, so we have access to much lower cost financing,” he said.

“As long as the big lessors have a better credit quality and can obtain capital at substantially lower cost than the airlines, we’ll have an advantage. But, if the airlines themselves can repair their balance sheets and do well, they’ll be able to buy a higher percentage of their new aircraft than lease them.”

Lessors like ALC also have huge buying power with the airframe and engine manufacturers. “If you’re an airline and you want to go buy five or 10 aircraft, you’re not going to get the pricing that Air Lease is able to negotiate with Boeing and Airbus, because we’re a long-term customer that has hundreds of aircraft in our backlog.”

Meanwhile, airlines are facing higher tax, labor and sustainability costs.

“In my meetings with airline CEOs throughout the world, they’re telling me their labor costs are going up faster than published inflation,” he said. “This is a real, serious problem.”

Alan Dron

Based in London, Alan is Europe & Middle East correspondent at Air Transport World.

Victoria Moores

Victoria Moores joined Air Transport World as our London-based European Editor/Bureau Chief on 18 June 2012. Victoria has nearly 20 years’ aviation industry experience, spanning airline ground operations, analytical, journalism and communications roles.