IATA Sees Airline Profits Hitting US$41 Billion in 2026

The International Air Transport Association (IATA) expects global airlines to post a combined net profit of US$41 billion in 2026, up from US$39.5 billion in 2025, while maintaining a 3.9% net margin. For 2026, IATA projects 5.2 billion passengers, an 83.8% load factor, and US$1.053 trillion in total revenue. Air cargo volumes are forecast to reach 71.6 million tonnes.

Willie Walsh, IATA’s Director General, said airlines are on track to generate a 3.9% margin and US$41 billion in profit in 2026, calling the projection “welcome news considering the headwinds that the industry faces,” including rising costs driven by aerospace supply-chain bottlenecks, geopolitical conflict, sluggish global trade, and increasing regulatory burdens. He said airlines have built “shock-absorbing resilience” that is enabling stable profitability.

Walsh cautioned, however, that industry margins remain too thin relative to airlines’ cost of capital. He argued that “industry-level margins are still a pittance considering the value that airlines create by connecting people and economies,” noting that the sector supports nearly 4% of the global economy and 87 million jobs. He added that “Apple will earn more selling an iPhone cover than the US$7.90 airlines will make transporting the average passenger,” underscoring the imbalance of profitability across the aviation value chain.

Walsh highlighted the strong performance of air cargo, which “has been particularly impressive,” supported by shifting trade flows under the US tariff regime. He said the sector benefited from “robust e-commerce and semiconductor shipments” tied to AI investment, as well as “front-loading to deliver products ahead of tariff deadlines” and increased demand as tariffed goods moved to new markets.

IATA expects total airline revenue to grow 4.5% in 2026 to US$1.053 trillion, outpacing a 4.2% rise in operating expenses. Passenger ticket revenue is forecast to reach US$751 billion, supported by a 4.9% increase in revenue passenger kilometers. Ancillary revenue is projected at US$145 billion, while cargo revenue is expected to reach US$158 billion. Persistent supply-chain constraints are expected to keep load factors at record levels.

Fuel costs are forecast to decline slightly to US$252 billion in 2026, with Brent crude expected to average US$62 per barrel and jet fuel at US$88 per barrel. Fuel will represent 25.7% of total operating expenses. Efficiency gains are expected to remain limited—just 1%—as supply-chain delays push the global fleet’s average age above 15 years.

Non-fuel operating expenses are projected to rise to US$729 billion. Labor remains the largest cost category at 28%, with productivity lagging amid training bottlenecks and operational challenges. Maintenance costs continue to climb due to parts shortages and an aging fleet, while lease rates and airport charges remain elevated. IATA noted that a weaker U.S. dollar may improve profitability for non-USD carriers, as 55–60% of airline costs are dollar-denominated.

Supply-chain constraints continue to limit airlines’ ability to meet demand. IATA said aircraft backlogs will grow as new orders outpace production. Regulatory costs also remain a concern, including proposed EU261 reforms and rising infrastructure charges at major hubs. Airspace restrictions, GNSS interference, and rerouting requirements continue to weigh on operational efficiency.

The outlook comes as Airbus cut its 2025 delivery target due to quality issues in metal fuselage panels on A320 aircraft, adding pressure to an industry already strained by production delays at both major manufacturers. Airlines warn that without newer, more efficient aircraft, they cannot reduce fuel costs while accommodating rising passenger volumes. The disruptions follow additional challenges for Airbus, which earlier this month recalled 6,000 A320-series jets over a software issue linked to cosmic radiation.

Despite these constraints, IATA maintains a positive outlook and notes that Europe is set to surpass the United States in net profit per passenger. Walsh said airlines have built “shock-absorbing resilience” supporting stable profitability, though regulatory costs in Europe and risks tied to conflict, drone activity, and GPS interference continue to weigh on results. He added that confidence in Airbus has weakened even as Boeing’s performance has improved, though both continue to face delivery delays.

In the Americas, traffic growth remains supported by economic stability and intra-regional demand. Weaker flows between North and South America have been offset by strong transatlantic traffic. Regional profitability remains sensitive to currency volatility. Several major carriers have completed Chapter 11 restructuring, shifting the region “from crisis-driven survival to cautious, efficiency-focused rebuilding,” according to IATA’s outlook.