Airlines to fly more passengers but profits to halve in 2026, industry warns
The International Air Transport Association (IATA) projects 5.1 billion passengers for 2026, a 2.4% increase from 2025, but warns profits will halve to $23 billion due to rising fuel costs and Middle East war disruptions. Middle Eastern airlines face losses, while European carriers are expected to remain the most profitable at a 3.1% net margin.
The International Air Transport Association (IATA) forecasts global passenger traffic will reach 5.1 billion in 2026, up 2.4% from 2025’s estimated 4.98 billion. Despite growth, profits are expected to shrink from $45 billion in 2025 to $23 billion this year, with net margins dropping from 4.2% to 2.0%. Fuel price hikes and Middle East war disruptions are driving the decline, though IATA Director General Willie Walsh called the situation resilient rather than a crisis. IATA’s 370 member airlines, representing 85% of global air traffic, will see revenue rise 9% to $1.165 trillion, but profitability varies regionally. Middle Eastern carriers, including Emirates and Qatar Airways, face negative margins due to fuel cost pressures, while European airlines lead profitability at 3.1%, followed by North America (2.5%) and Asia-Pacific (2.1%). Walsh noted per-passenger profit will fall to $4.50, barely enough for a hot dog at FIFA World Cup venues. The war in the Middle East has worsened airline outlooks, though demand remains strong. IATA attributed growth to pricing adjustments rather than volume recovery, with ticket prices down 26% over the past decade. Walsh emphasized the industry’s resilience but warned rising costs could further strain margins. Fuel price shocks are being partially absorbed by airlines, despite higher ticket prices.
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