Why Airline CEOs Should Put Payment Orchestration on the Board Agenda

Executive Summary

The global airline industry stands at a critical inflection point. While passenger demand has rebounded to record levels and revenues are soaring toward the trillion-dollar mark, profitability remains perilously thin. With net margins hovering around 3.7%—roughly half the average across all industries—every operational decision carries outsized strategic weight [1]. In this environment, payment processing has evolved from a back-office necessity into a boardroom imperative.The numbers tell a stark story.

Airlines collectively spend over $20.3 billion annually on payment acceptance, representing approximately 2% of total ticket revenue [2]. To put this in perspective, this expense alone consumes more than half of the industry's entire global net profit of $36 billion [1]. For Chief Financial Officers grappling with razor-thin margins, Chief Technology Officers managing digital transformation initiatives, and Chief Executive Officers seeking sustainable competitive advantages, payment orchestration represents one of the most immediate and impactful levers available.

This analysis examines why payment infrastructure deserves C-level attention, quantifies the financial impact of strategic payment decisions, and demonstrates how modern orchestration platforms can transform payments from a profit drain into a revenue engine. The evidence is clear: in an industry where every basis point matters, payment optimization is not just an operational improvement—it is a strategic imperative that directly impacts shareholder value.

The Hidden Profit Drain: How Payments Consume Half Your Bottom Line

The airline industry's financial reality is more precarious than most executives realize. While headlines celebrate record passenger volumes and revenue milestones, the underlying profitability picture reveals an industry operating on financial thin ice. The International Air Transport Association (IATA) projects that airlines will serve a record 4.99 billion travelers in 2025, generating total revenues of $979 billion [1]. Yet this impressive top-line growth masks a fundamental challenge: the industry's structural inability to convert revenue into sustainable profits.The profitability paradox becomes stark when examined through the lens of payment costs.

IATA's comprehensive analysis reveals that the global airline industry's expected net profit of $36.0 billion translates to a mere 3.7% net profit margin [1]. This figure represents approximately half the profitability achieved across other industries, highlighting the unique economic pressures that define airline operations. Willie Walsh, IATA's Director General, characterized this performance as demonstrating resilience while acknowledging it provides only a thin buffer against market volatility [1].Within this constrained financial environment, payment acceptance costs represent a massive and often underestimated drain on profitability.

A landmark study conducted by Edgar, Dunn & Company, commissioned by IATA, quantified the industry's payment burden at $20.3 billion annually on revenues of $977 billion in 2019, the last normal year of operations [2]. This translates to 2.1% of total revenue being consumed by the simple act of collecting payment from customers. Consulting firm Globant corroborates this analysis, citing an average Merchant Discount Rate (MDR) for airlines of 2.5% of transaction value [3].The strategic implications of these figures cannot be overstated. Payment acceptance costs are not a rounding error on the income statement—they represent a direct and substantial erosion of potential profits. When compared to the industry's projected $36 billion in global net profit for 2025, the historical $20+ billion in payment costs reveals that processing transactions consumes more than 56% of the industry's hard-won profits. This reframes the value proposition of payment optimization entirely. A payment partner capable of reducing processing costs by just 10% would contribute over $2 billion directly back to industry bottom lines—potentially increasing net profits by more than 5% across the sector.

The situation in Europe, while marginally better than the global average, presents similar challenges. European airlines are projected to achieve a net profit of $11.3 billion in 2025, corresponding to a 4.3% margin [1]. While this represents an improvement over previous years, it remains exceptionally slim by cross-industry standards. For European carriers, particularly those in the BENELUX region where Paybyrd maintains strong market presence, payment optimization represents one of the most direct paths to improved financial performance.This financial pressure is compounded by structural constraints that limit traditional growth strategies.

A 2025 McKinsey analysis highlights a significant supply constraint facing the industry, with a global deficit of roughly 2,000 aircraft due to pandemic-era production slowdowns and ongoing supply chain disruptions [4]. This capacity constraint means airlines cannot simply add more flights to grow revenue. The primary path to improved profitability, therefore, lies in increasing the margin on each ticket sold using existing fleet capacity.In this context, optimizing payment acceptance becomes a primary strategy for enhancing per-passenger profitability. Every improvement in conversion rates, every reduction in processing fees, and every prevention of fraudulent transactions directly contributes to the bottom line.

The mathematics are compelling: in an industry where a 1% improvement in net margin can represent hundreds of millions in additional profit, payment optimization deserves the same strategic attention traditionally reserved for fuel hedging, route optimization, and fleet management decisions.The data reveals another concerning trend that amplifies the importance of payment efficiency. McKinsey's research indicates that in 2024, only 41% of tracked airlines managed to earn their cost of capital [4]. This means that a majority of the world's carriers are, from an investor's perspective, destroying economic value even as their aircraft operate at high load factors.

For airline boards and C-level executives, this statistic underscores the urgent need to identify and optimize every available profit lever.Payment orchestration emerges as one of the most immediate and controllable of these levers. Unlike fuel costs, which are subject to global commodity markets, or labor expenses, which are constrained by union negotiations and regulatory requirements, payment processing represents an area where airlines can exercise direct control over costs and performance. Modern payment orchestration platforms offer the potential to reduce processing fees, increase approval rates, prevent fraud, and improve cash flow—all while enhancing the customer experience that drives loyalty and repeat business.The financial case for payment optimization becomes even more compelling when considered against the backdrop of industry volatility. Airlines operate in an environment characterized by external shocks, from fuel price spikes to regulatory changes to global health crises. In such an environment, having control over payment infrastructure provides a measure of financial stability and predictability that can prove invaluable during turbulent periods.

A robust payment platform can help maintain cash flow during downturns, optimize working capital during growth phases, and provide the flexibility needed to adapt to changing market conditions.For Chief Financial Officers evaluating investment priorities, payment infrastructure offers a rare combination of immediate impact and long-term strategic value. The return on investment is both measurable and substantial, with improvements in approval rates, reductions in processing costs, and enhancements in fraud prevention delivering quantifiable benefits that flow directly to the bottom line. Moreover, these benefits compound over time, as improved payment performance drives customer satisfaction, reduces operational complexity, and provides the foundation for future digital commerce initiatives.