IATA Forecasts Airline Profits Halving by 2026

The International Air Transport Association (IATA) released an outlook indicating that global airline profits are expected to decline significantly in 2026, projecting a net profit of $23 billion, down from an estimated $45 billion in 2025. This downturn is attributed to war-related disruptions in the Middle East and a 70% increase in jet fuel prices.

IATA's Director General, Willie Walsh, stated that the airline industry is facing its worst outlook, with profit margins shrinking from 4.2% in 2025 to 2.0% in 2026. The report also noted that Middle Eastern carriers are expected to incur losses due to weak demand and operational disruptions, while other airlines will struggle to maintain profitability.

The net profit per passenger is projected to fall to $4.50 in 2026, down from $9.10 in 2025. Overall, the airline industry's return on invested capital is expected to decrease to 4.3% in 2026, highlighting the structural challenges faced by the global aviation sector.