Airlines’ annual payment processing cost hits $25bn

Photo Credit: Pilot Career News

The International Air Transport Association has said airlines spend more than $24.5bn, or approximately $25bn, annually processing payments, highlighting the financial pressures facing the industry as it embraces digital technologies to improve passenger experience and strengthen financial resilience. 

IATA’s interim Director General, Chief Financial Officer and Senior Vice-President, Corporate Services, Sandrine Le Borgne, revealed this on Wednesday at the opening of the IATA World Financial Symposium and World Passenger Symposium in Macao, where industry leaders examined the future of airline retailing, payments and digital identity.

At the event, she said airlines must look beyond the convenience of digital payments, artificial intelligence and biometric identification to ensure these innovations reduce costs, simplify operations and deliver sustainable financial benefits.

She said, “Today, a traveler can use AI to plan a trip. They can pay with a digital wallet and use biometrics for a more seamless journey at the airport. The challenge now is realizing the value that these innovations can create to make travel more efficient and improve financial resilience.”

IATA held that the growing use of AI assistants and automated agents to discover, compare and purchase travel services presents both opportunities and risks for airlines.

While these technologies could transform how passengers plan and book trips, the association stressed that airlines must retain control of their data, commercial relationships and the quality of information underpinning their services.

Le Borgne further held that modern airline retailing, built around the offers and orders framework, “is central to this transition. Seven airlines are already using or implementing Orders, while more than 20 others are expected to follow from 2027. Technology providers have also committed more than $1.7bn to Offers and Orders.

“Offers and Orders are the foundation; AI is the accelerator. They need to move forward together as AI increasingly reshapes how travel is discovered, sold, and serviced.”

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The association maintained that airlines must integrate financial processes into their digital transformation from the outset rather than treat them as an afterthought.

Despite the convenience offered by digital wallets and other emerging payment methods, IATA warned that airlines must carefully assess their effects on transaction costs, cash flow and financial risk.

The IATA chief also called for reconciliation, settlement and revenue accounting to be incorporated into the transition to Offers and Orders to eliminate operational complexity rather than simply digitise existing processes.

Le Borgne noted, “New payment methods taking advantage of digitalisation, can increase customer choice, but also affect cost, cash flow, and risk. With airlines spending more than US$24.5bn annually to process payments, these effects must be considered together.

“Offers and Orders; Reconciliation, settlement, and revenue accounting must be built into the transformation from the start to remove complexity rather than simply digitize it.”

Also, beyond payments, IATA identified biometrics and digital travel credentials as important tools for making airport procedures faster and more convenient.

However, the association said the benefits remain limited because many biometric solutions operate within individual airports or countries, preventing passengers from enjoying a consistent experience across international journeys.