The global airline industry is expected to generate a record profit of US$41 billion in 2026, according to the International Air Transport Association’s (IATA) latest financial outlook, although overall margins will remain constrained by high costs, supply chain delays and geopolitical pressures.
IATA said the projected profit represents an increase from US$39.5 billion in 2025, but the net margin will remain unchanged at 3.9 per cent. Profit per passenger is forecast to hold at US$7.90, below the post-pandemic high of US$8.50 recorded in 2023.
IATA forecasts steady profit growth
Industry revenues are expected to climb to US$1.053 trillion in 2026, a 4.5 per cent rise on 2025, outpacing operating cost increases of 4.2 per cent. Passenger numbers are forecast to reach 5.2 billion and load factors are set to hit a new record of 83.8 per cent.
Cargo volumes are projected to grow 2.4 per cent to 71.6 million tonnes, supported by resilient e-commerce flows and demand linked to semiconductor shipments for AI technologies.
Despite the improving top line, IATA warned that the sector will still struggle to cover its cost of capital. Return on invested capital is expected to remain at 6.8 per cent in 2026, below an estimated weighted average cost of capital of 8.2 per cent.
Director General Willie Walsh said that while airlines have shown strong resilience, profitability remains modest given the industry’s economic role.
“Airlines stand at the core of a value chain that underpins nearly 4 per cent of the global economy and supports 87 million jobs, yet margins are still extremely tight,” he said. “Apple will earn more selling an iPhone cover than airlines make transporting the average passenger.”
Persistent supply chain challenges continue to limit fleet renewal and keep aircraft age at record highs. Jet fuel prices are expected to edge down slightly to US$88 per barrel next year, but non-fuel costs are set to rise, driven by higher labour expenses, maintenance delays, infrastructure charges and elevated leasing rates.
Regionally, the Middle East is forecast to remain the most profitable market with a 9.3 per cent margin, supported by strong long-haul demand and expanding hub connectivity. Europe is expected to deliver the highest absolute profit at US$14 billion, while North America will see steady performance despite domestic market softness.
IATA said travellers remain highly satisfied, with survey data showing 97 per cent content with their last trip and strong support for the value of air connectivity, even as the industry continues its transition toward net-zero emissions by 2050.
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