The International Air Transport Association has slashed its 2026 global airline profit forecast to 23 billion dollars, roughly half the previously projected 41 billion dollars and also approximately half the 45 billion dollars in net profit recorded in 2025, attributing the dramatic reversal to war-related disruptions in the Middle East and a 70 percent rise in jet fuel prices that have compressed margins across the entire industry.
IATA Director General Willie Walsh, presenting the revised financial outlook at the 82nd IATA Annual General Meeting and World Air Transport Summit in Rio de Janeiro, said all airline bottom lines were suffering from the fuel price shock, with net profit margins expected to fall to 2.0 percent in 2026, down from 4.2 percent in 2025 and half of the 3.9 percent that had been projected before the crisis. Net profit per passenger was expected to fall to 4.50 dollars, half the 9.10 dollars achieved in 2025.
Walsh said Gulf carriers faced operational uncertainty following a near complete shutdown of airspace at the outbreak of hostilities and were doing an outstanding job maintaining connectivity under difficult conditions, but that major financial impacts were unavoidable. He said while air fares were rising and airlines were improving efficiency, the adjustments were insufficient to maintain profitability at prior-year levels, and that smaller carriers that started the year with weak balance sheets were particularly at risk.
Total industry revenues were expected to reach 1.165 trillion dollars in 2026, up 9.4 percent on 2025 figures, driven by passenger numbers expected to reach 5.1 billion and a record passenger load factor of 84 percent. However, operating profit was expected to fall to 48 billion dollars from 76.4 billion in 2025, and return on invested capital was projected at 4.3 percent, below the estimated 8.5 percent weighted average cost of capital. Walsh said the gap highlighted the structural weakness of the airline industry where profitability shocks quickly erode capital efficiency.
