Global airlines are projected to post a net profit of US$41.1 billion in 2026 while carrying a record 5.2 billion passengers, despite rising costs, supply chain disruptions, and geopolitical challenges, the International Air Transport Association (IATA) has said.
The aviation industry, which supports roughly 4 percent of the global economy, is expected to see passenger traffic grow 4.9 percent next year, driving ticket revenues to US$751 billion. Total industry revenues are forecast to reach US$1.053 trillion, an increase of 4.5 percent from 2025, IATA said during its annual Global Media Day in Geneva.
The 2026 profit estimate is slightly higher than the US$40.8 billion expected for 2025, maintaining a net profit margin of 3.9 percent. Airlines are also expected to achieve record operational efficiency, with the average passenger load factor the proportion of seats filled reaching 83.8 percent.
Airline Industry resilience amid challenges
IATA Director General Willie Walsh noted that the forecast underscores the aviation industry’s resilience. “Airlines continue to deliver profits in the face of a complex and demanding set of challenges,” he said.
Among these challenges are rising operating costs, persistent supply chain disruptions, delayed deliveries of new aircraft, and geopolitical conflicts affecting trade and travel. Airlines also face growing regulatory obligations, which add to operational pressures.
Fuel costs are expected to total US$252 billion in 2026. However, non-fuel expenses particularly labour costs are the largest burden, projected to reach US$725 billion, up 5.8 percent from 2025. IATA highlighted that labour cost management, alongside operational efficiency, will be critical for maintaining profitability.
The air cargo sector is also expected to perform robustly, with revenues forecast at US$155 billion, supported by strong e-commerce demand and logistical growth.
Airlines continue to explore Sustainable Aviation Fuel (SAF) technology as a key strategy to reduce long-term costs and meet environmental commitments. Walsh emphasized that fleet modernization and SAF adoption are critical for both operational efficiency and regulatory compliance.
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Regional performance disparities
IATA’s regional forecasts show stark differences. Middle Eastern carriers are expected to lead globally with net profits of $6.8 billion and an exceptional 9.3 percent profit margin. The region benefits from its role as a global connectivity hub, favorable regulatory frameworks, and fleet modernization that offsets aircraft delivery delays. Passenger demand in the Middle East is forecast to grow 6.1 percent, slightly outpacing a 5.4 percent increase in capacity.
In contrast, African airlines are projected to earn only $200 million, with very thin margins. Growth is constrained by visa restrictions, high operating costs, and infrastructure challenges, even as the continent’s aviation market continues to expand.
Globally, IATA stressed that airlines’ profitability hinges not just on managing fuel prices but on effectively controlling labour and other operational costs while ensuring capacity meets growing demand. Delays in aircraft deliveries continue to pressure airlines, limiting their ability to respond efficiently to passenger growth and maintain competitive ticket pricing.
Analysts say the forecast illustrates the resilience and adaptability of the global airline industry, which has recovered strongly following the COVID-19 pandemic, but note that persistent geopolitical tensions, rising costs, and environmental regulations will remain key constraints.
As 2026 approaches, airlines worldwide are expected to continue investing in fleet modernization, technology upgrades, and SAF adoption to balance profitability with sustainability, while regional disparities in performance highlight the ongoing need for tailored policy support and infrastructure improvements.
The global airline industry has been navigating a turbulent recovery since the Covid-19 pandemic brought international travel to a near standstill in 2020. According to the International Air Transport Association (IATA), airlines collectively posted losses of more than US$180 billion between 2020 and 2022, marking the worst financial crisis in the sector’s history. Many carriers survived only through government bailouts, layoffs, restructuring, and drastic capacity cuts.
By 2023–2024, the rebound in passenger demand — driven by reopened borders, pent-up tourism appetite, and the return of business travel — pushed global traffic above pre-pandemic levels for the first time. IATA said global passenger numbers in 2024 reached 4.7 billion, surpassing the 4.5 billion recorded in 2019. Middle Eastern and Asian carriers led the rebound, while African airlines, which account for less than 3% of global traffic, continued to lag due to high operating costs, currency challenges and limited connectivity.
Despite the recovery, airlines worldwide face rising cost pressures, particularly from fuel, which typically represents a quarter or more of operating expenses. The industry has also seen renewed volatility due to unstable oil markets, geopolitical tensions, Red Sea disruptions affecting cargo routes, and chronic aircraft delivery delays from manufacturers such as Boeing and Airbus.
Aircraft shortages have emerged as a major constraint, with both manufacturers struggling to meet orders. Boeing has faced production caps and regulatory scrutiny following safety issues and quality-control problems, while Airbus has been hindered by supply chain shortages of engines, seats and specialized components. The bottlenecks have forced airlines to extend the lifespan of aging fleets, lease older jets at higher rates, and delay expansion plans.
Labour shortages also remain an acute challenge, particularly for pilots, engineers and air-traffic controllers. Major hubs in Europe, the Gulf and North America have reported periodic operational disruptions as airports grapple with staff shortages and congested terminals. The return of passengers has outpaced workforce recovery, creating bottlenecks during peak travel seasons.
