The International Air Transport Association (IATA) has projected a steep decline in global airline profitability in 2026, attributing the downturn to rising jet fuel prices and ongoing geopolitical tensions, particularly in the Middle East.
According to its latest outlook, the global airline industry is expected to record a combined net profit of $23 billion in 2026, a significant drop from the $45 billion projected for 2025 and below earlier estimates of $41 billion.
IATA said the decline reflects worsening operating conditions, with fuel prices rising by about 70 per cent and war-related disruptions affecting key aviation routes. These challenges are expected to significantly weaken margins across most regions.
The association noted that while most regions will remain profitable, the Middle East is expected to be the only region to slip into losses due to airspace disruptions and weakened demand.
IATA Director General Willie Walsh explained that airlines are under pressure as fuel costs rise faster than fares can adjust, forcing carriers to absorb part of the increased expenses and eroding profit margins.
He added that global net profit margins are projected to fall to 2.0 per cent in 2026, down from 4.2 per cent in 2025, while profit per passenger is expected to halve to $4.50.
The association warned that the sharp decline in returns highlights deeper structural vulnerabilities in the aviation sector, noting that rising costs and low margins continue to challenge long-term sustainability despite ongoing efficiency improvements.
