GENEVA – The global aviation industry is projected to maintain profitability amid persistent supply chain challenges, with net profits expected to reach $41 billion in 2026, according to the latest financial forecast released by the International Air Transport Association (IATA).
Steady Profitability Amid Ongoing Headwinds
IATA forecasts that airlines worldwide will achieve a total net profit of $41 billion in 2026, up from $39.5 billion in 2025. While this would mark a historic high, the net profit margin is expected to remain stable at 3.9%, unchanged from 2025. Net profit per passenger is projected at $7.90, slightly below the $8.50 recorded in 2023 but matching 2025 levels.
Operating profits are expected to rise from $67 billion in 2025 to $72.8 billion in 2026, with the operating margin improving from 6.6% to 6.9%. The return on invested capital (ROIC) is projected at 6.8%, remaining below the weighted average cost of capital (WACC) of 8.2%.
Revenue to Surpass $1 Trillion as Passenger, Cargo Demand Grows
Total industry revenues are forecast to reach $1.053 trillion in 2026, a 4.5% increase from $1.008 trillion in 2025. Passenger load factors are expected to hit a record high of 83.8%, with passenger traffic growing 4.4% to 5.2 billion travelers. Cargo volumes are projected to increase 2.4% to 71.6 million tonnes.
"Considering the headwinds facing aviation – aerospace supply chain bottlenecks, geopolitical conflicts, sluggish global trade and increasing regulatory burdens – achieving a 3.9% net profit margin and $41 billion profit in 2026 would be good news," said Willie Walsh, IATA's Director General.
Profitability-Value Mismatch Calls for Value Chain Realignment
Despite airlines' resilience, industry profitability remains insufficient to cover capital costs. "Airlines create enormous value at the heart of a value chain that supports 87 million jobs and nearly 4% of global GDP. Yet Apple makes more profit selling one iPhone case than airlines earn transporting an average passenger," Walsh noted, calling for regulatory relief and infrastructure improvements.
Cargo Sector Defies Trade Headwinds
Air cargo has demonstrated remarkable resilience, adapting to shifting trade patterns amid U.S. protectionist tariffs. "Air cargo became the hero of global trade, partly due to booming e-commerce and semiconductor shipments supporting AI investments," Walsh observed.
Financial Outlook Drivers
Total revenues are expected to grow 4.5% to $1.053 trillion, outpacing a 4.2% increase in operating expenses ($981 billion). Key projections:
Passenger revenue: $751 billion (+4.8%) driven by 4.9% RPK growth
Ancillary revenue: $145 billion (+5.5%), now representing 14% of total revenue
Cargo revenue: $158 billion (+2.1%) with stable yields despite trade slowdown
Fuel costs are expected to decline slightly to $252 billion, with oil prices projected at $62/barrel. Non-fuel costs will rise 5.8% to $729 billion, with labor now constituting 28% of total costs.
Regional Performance Outlook
| Region | 2026 Net Profit (F) | Profit Margin | Profit per Passenger |
|---|---|---|---|
| Africa | $0.2 billion | 1.0% | $1.30 |
| Asia-Pacific | $6.6 billion | 2.3% | $3.20 |
| Europe | $14.0 billion | 4.9% | $10.90 |
| Latin America | $2.0 billion | 3.8% | $5.70 |
| Middle East | $6.8 billion | 9.3% | $28.60 |
| North America | $11.3 billion | 3.4% | $9.80 |
Passenger Perspective
Air travel continues to deliver exceptional value, with 2026 average round-trip fares projected to be 36.8% cheaper in real terms than 2015 levels. An IATA survey of 6,500 travelers across 14 countries found 97% satisfaction with recent flights, with 88% agreeing air travel improves their lives.
The industry maintains strong public support for its role in global connectivity and its commitment to net-zero emissions by 2050, with 79% of travelers confident in aviation's sustainability efforts.