Global airline profits will halve through 2026. The industry will grapple with around $100 billion in additional costs, caused mainly by rising fuel prices linked to the war in the Middle East. The data comes from the latest forecast released by the International Air Transport Association (Iata), the international organization representing air carriers around the world.
The collapse of profits
According to new IATA estimates, the report states, the overall profitability of the aviation sector for 2026 will stand at 23 billion dollars. The figure is almost half the $45 billion recorded in 2025, and is also lower than the previous forecast of a profit of $41 billion. The net profit margin will therefore fall to 2%, compared to 4.2% last year. The net profit calculated per single passenger will also undergo a drastic reduction, going from 9.1 dollars to 4.5 dollars.
Expenses exceed revenues
The decline in profits is not due to a decrease in passengers or sales. The overall revenues of the sector, in fact, are estimated to grow by 9.4%, for a total of 1,165 billion dollars. The positive trend in turnover, however, will be canceled out by the increase in operating expenses, which will grow by 13% to reach 1,117 billion dollars. This gap will reduce net operating margins from 7.2% in 2025 to 4.1% in 2026.
The weight of the fuel
The main cause of this economic contraction is the price of jet fuel, which has increased by 70% following geopolitical tensions. IATA director general Willie Walsh explained that the war in the Middle East and resulting disruptions had significantly worsened the financial outlook. The companies are trying to compensate for the increases by adjusting ticket prices and improving internal efficiency, but these interventions “will not be enough to cover the increase in costs”.
The crisis in the Gulf airspace
The most critical situation concerns carriers operating in the Gulf area. These societies suffer the consequences of the almost total closure of airspace which occurred at the outbreak of the conflict. In addition to geopolitical issues, the industry is suffering from other structural challenges: supply chain delays, a weakening US dollar, infrastructure limitations and a shortage of new aircraft. The obligation to use older aircraft has resulted in an additional outlay of 11 billion dollars in fuel by 2025.