Major European Airlines Battle for Profitability in 2025

Europe’s aviation sector has shown remarkable resilience as it rebounds from the pandemic, with airlines posting substantial profits. The question of which airline emerges as the most profitable in 2025 requires a nuanced approach, considering various operational models. This article evaluates three major players: the ultra-low-cost carrier Ryanair Group, the legacy airline conglomerate International Airlines Group (IAG), and the ambitious Turkish Airlines. Each of these carriers has distinct strengths that contribute to their profitability in an increasingly competitive landscape.

Ryanair: Dominating the Low-Cost Arena

Ryanair, the Irish ultra-low-cost airline, has established itself as a formidable profit generator in Europe. In fiscal year 2024, Ryanair reported a profit after taxation of €1.92 billion on revenues of €13.44 billion. The airline achieved an impressive load factor of approximately 94%, driven by a strategy focused on high utilization, minimal frills, and strict cost control.

According to Gridpoint Consulting, Ryanair’s profitability stems from its “rock-solid balance sheet,” characterized by low debt levels and substantial cash reserves. With a passenger count reaching 183.7 million and an average fare increase of around 21% from the previous year, Ryanair continues to thrive in the low-cost segment. This strong performance is expected to carry into 2025 and beyond, reaffirming Ryanair’s position as a leader in the budget airline market.

IAG: A Strong Player Among Legacy Airlines

The International Airlines Group (IAG), which includes British Airways, Iberia, and Vueling, is another major contender in the profitability race. IAG reported pre-tax profits of €3.8 billion for 2024, making it one of the highest earners among European airlines. Its operating margin stood at 13.8%, with a return on capital of 17.3%, showcasing its ability to navigate the complexities of a multi-brand airline group.

While IAG performs strongly as a collective entity, the assessment of individual airline profitability reveals a more complex picture. British Airways achieved a margin of 14.2%, and Iberia followed closely with 13.6%. Nonetheless, when evaluating standalone performances, IAG does not provide a single airline that outperforms others in profitability metrics, particularly when compared to Turkish Airlines.

Turkish Airlines: The Standout Legacy Carrier

In a surprising turn, Turkish Airlines, the flag carrier of Türkiye, emerged as the most profitable airline in Europe for 2025, particularly when excluding low-cost carriers like Ryanair. In 2024, Turkish Airlines reported a net profit of approximately €2.06 billion (around US$2.4 billion) in a challenging global market. Its revenues reached US$22.7 billion, reflecting a year-on-year growth of just over 8%.

The airline’s strength lies in its robust cargo operations, which witnessed a remarkable growth of about 35%. Turkish Airlines’ Earnings Before Interest, Tax, Depreciation, Amortisation, and Rent (EBITDAR) amounted to US$5.7 billion, marking a significant margin of 25.3%. The airline also benefits from substantial income derived from investment activities, which bolstered its profit figures.

Additionally, Turkish Airlines operates the world’s third-largest air cargo carrier, as reported by the International Air Transport Association (IATA), and holds the Guinness World Record for the most destinations served globally, primarily from its hub in Istanbul. This extensive network and cargo capability position Turkish Airlines as the leading legacy carrier in terms of profitability across Europe.

Understanding Profitability Models

The distinctions between low-cost, legacy-group, and individual airline models are crucial when discussing profitability. Ryanair’s low-cost approach thrives on minimal turnaround times, maximized utilization, and ancillary revenue streams. In contrast, the legacy-group model, exemplified by IAG, involves multiple airlines with different brands and operational complexities that can incur additional costs.

Turkish Airlines, as a full-service network operator, combines these strengths with a global reach and robust cargo operations. This differentiation in business models highlights the varying profitability drivers among airlines in Europe.

For those in the aviation sector—strategists, investors, or enthusiasts—understanding these dynamics is essential. Ryanair remains the benchmark for low-cost operations. IAG is a standout among legacy groups, while Turkish Airlines represents the highest profitability among full-service airlines in Europe.

Looking ahead, the landscape remains challenging. Factors such as load factor, fare pressure, fuel hedging, and cargo dynamics will be critical in sustaining profitability. Ryanair faces risks from potential fare erosion and rising operational costs. IAG’s success will depend on recovering premium traffic and managing costs across its brands. Turkish Airlines must navigate geopolitical challenges and sustain cargo growth while managing debt levels.

In conclusion, while Turkish Airlines has established itself as a leader in profitability, the entire European aviation industry must remain vigilant. Despite a record global profit of US$36.6 billion in 2024, profit margins are under pressure, highlighting the importance of strategic adaptability in a rapidly evolving market.