Airlines' 2026 Profit Forecast Cut by 50% Amid Crisis

The International Air Transport Association (IATA) projects that airlines worldwide will see a combined net profit of $23 billion in 2026, a significant decline from the previously estimated $41 billion, representing a nearly 50% drop. This downturn is attributed to disruptions in the Middle East, particularly the closure of the Strait of Hormuz, which has affected global fuel supplies.

The airline industry's net profit margin is expected to fall to 2.0%, down from an earlier forecast of 3.9%, and significantly lower than the 4.2% achieved in 2025. Operational profit is forecasted to decrease to $48 billion from $76.4 billion in 2025.

Despite these challenges, total industry revenue is expected to grow to a record $1.165 trillion in 2026, a 9.4% increase from $1.065 trillion in 2025. Fuel costs are projected to rise nearly 40%, reaching $350 billion in 2026, which will represent the largest cost category for airlines.

The Middle East carriers are expected to face the greatest impact, with significant operational uncertainty due to ongoing conflicts.