The global airline industry is poised to achieve stable profitability in 2026, with a projected net profit of $41 billion, according to the latest forecast released by the International Air Transport Association (IATA). While this marks an improvement from 2025's estimated $39.5 billion, the net profit margin is expected to remain flat at 3.9%, reflecting persistent challenges amid recovery.
Stabilized Profitability Amid Ongoing Headwinds
Operating profits are projected to rise to $72.8 billion in 2026 (up from $67 billion in 2025), with the operating margin improving to 6.9% from 6.6%. However, the industry's return on invested capital (ROIC) of 6.8% will continue to trail its weighted average cost of capital (WACC) of 8.2%, underscoring structural profitability challenges.
Total industry revenues are forecast to grow 4.5% to $1.053 trillion, driven by record passenger demand (5.2 billion travelers, up 4.4%) and cargo volumes (71.6 million tonnes, up 2.4%). Load factors are expected to reach an all-time high of 83.8%.
"Airlines are delivering stable profits despite aerospace supply chain bottlenecks, geopolitical conflicts, trade slowdowns, and mounting regulatory costs," said IATA Director General Willie Walsh. "The resilience is commendable, but the industry's margins remain disproportionately low given its economic contributions."
Value Creation Mismatch Persists
With airlines earning just $7.90 net profit per passenger, Walsh highlighted stark profitability disparities across the aviation value chain: "An iPhone case generates more profit than transporting a passenger. Engine manufacturers and service providers consistently outperform airlines in margins."
The report notes that aviation supports 4% of global GDP and 87 million jobs, yet yields remain compressed by high taxes, infrastructure inefficiencies, and regulatory burdens.
Cargo Resilience Defies Trade Shifts
Air cargo has demonstrated remarkable adaptability, with 2026 revenues projected at $158 billion (+2.1% year-over-year). E-commerce growth and semiconductor shipments for AI investments have offset trade route disruptions caused by U.S. protectionist tariffs.
"Cargo's flexibility to reroute tariff-affected goods and meet peak demand showcases its critical role in global trade realignment," Walsh observed.
Financial Outlook by Region
| Region | 2025 Net Profit (Est.) | 2026 Net Profit (Fcast.) | Profit per Pax | RPK Growth |
|---|---|---|---|---|
| Africa | $200M (1.1%) | $200M (1.0%) | $1.30 | 6.0% |
| Asia-Pacific | $6.2B (2.3%) | $6.6B (2.3%) | $3.20 | 7.3% |
| Europe | $13.2B (4.8%) | $14.0B (4.9%) | $10.90 | 3.8% |
| Latin America | $2.5B (5.2%) | $2.0B (3.8%) | $5.70 | 6.6% |
| Middle East | $6.6B (9.3%) | $6.8B (9.3%) | $28.60 | 6.1% |
| North America | $10.8B (3.3%) | $11.3B (3.4%) | $9.80 | 1.5% |
Key Cost Drivers
Fuel expenses will decline slightly to $252 billion (-0.3%) as crude prices fall to $62/barrel, though refining margins keep jet fuel at $88/barrel. Non-fuel costs will rise 5.8% to $729 billion, with labor now comprising 28% of expenses amid productivity challenges.
Regulatory costs are mounting, including $1.7 billion for CORSIA compliance and $4.5 billion in sustainable aviation fuel (SAF) premiums. Supply chain delays have pushed the global fleet age to over 15 years, limiting fuel efficiency gains to just 1%.
Persistent Challenges
Aircraft delivery delays continue to constrain capacity growth, while infrastructure bottlenecks and geopolitical disruptions (including airspace closures and GNSS interference) hamper operations. European regulators face criticism for maintaining burdensome rules like EU261 passenger rights regulations.
For travelers, airfares remain 36.8% cheaper in real terms than 2015 levels, with 97% passenger satisfaction reported in IATA's latest survey.