Middle East disruption and fuel costs halve airline profit outlook
09-Jun-2026
IATA has warned that global airline profitability is expected to halve in 2026 as war-related disruption in the Middle East and high fuel prices weigh on margins.
The association forecasts industry net profit of $23 billion, down from a previous projection of $41 billion, with Middle East carriers expected to fall into loss.
IATA also raised concerns over slow SAF production growth, warning that supply remains far below the level needed to support aviation’s net zero ambitions.
The global airline industry is facing a sharp reduction in profitability, with IATA warning that war-related disruption in the Middle East and elevated fuel prices are set to cut the expected 2026 net profit by almost half.
Willie Walsh’s Report on the State of the Global Air Transport Industry at the IATA 82nd AGM: watch online
In its latest financial outlook for the global airline industry, IATA said airlines are now expected to deliver a combined net profit of $23 billion in 2026, compared with a previous projection of $41 billion. The figure is also around half of the estimated $45 billion net profit for 2025, highlighting the pressure facing carriers as geopolitical instability and fuel costs weigh on margins.
The regional landscape, however, is highly differentiated. At the geographic centre of the Middle East war, airlines in the Middle East are expected to collectively fall into the red with weak demand and operational disruptions.
All other regions are expected to deliver profits, but at reduced levels from previous projections.
Highlights include:
Airlines are expected to achieve a combined total net profit of $23.0 billion in 2026, which is roughly half the previously projected $41 billion. It is also roughly half the $45 billion net profit estimate for 2025.
The net profit margin is expected to be 2.0 percent in 2026, roughly half the previously projected 3.9 percent. It is also less than half the 4.2 percent estimate for the 2025 net profit margin.
Net profit per passenger transported is expected to be $4.50, half the $9.10 achieved in 2025.
Operating profit in 2026 is expected to be $48.0 billion (down from $76.4 billion in 2025) for a net operating margin of 4.1 percent (down from 7.2 percent in 2025).
Return on invested capital (ROIC) is expected to be 4.3 percent (down from 6.6 percent in 2025). This is below the 8.5 percent estimated weighted average cost of capital. The gap highlights again the structural weakness of the airline industry where profitability shocks quickly erode capital efficiency.
Total industry revenues are expected to reach $1.165 trillion in 2026 (up 9.4 percent on the $1.065 trillion in 2025).
The passenger load factor is forecast to continue to set record highs with airlines expected to fill 84.0% of all seats over the year. That is an improvement on 83.5 percent in 2025.
Passenger numbers are expected to reach 5.1 billion in 2026 (up 2.4 percent on 2025).
Cargo volumes are expected to reach 71.7 million tonnes in 2026 (up 0.2 percent on 2025).
“Airlines are bearing the brunt of the fuel price shock. While air fares are rising, airlines are still absorbing part of the hike in their bottom lines. Net profit per passenger is expected to fall to $4.50, half of what it was last year. Under the circumstances, that shows resilience. But it won’t even buy you a hot dog at most of the FIFA World Cup venues and it does not leave much of buffer should other costs or taxes start rising,” saif Willie Walsh, IATA’s Director General.
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