IATA’s latest outlook forecasts airline profits climbing to a record US$41 billion in 2026, up slightly from the US$39.5 billion projected for 2025. Despite the higher figure, the industry’s net margin is expected to hold steady at 3.9 percent, with profit per passenger unchanged at US$7.90 — still below the 2023 peak of US$8.50.
IATA Director General Willie Walsh praised airlines for navigating rising costs, geopolitical tensions, and supply chain pressures, but stressed that industry returns remain disproportionately low compared with the economic value aviation generates. He noted that airlines underpin nearly 4 percent of global GDP and support 87 million jobs, yet still earn less per passenger than the profit some companies make on small retail accessories. Walsh reiterated the need to rebalance profitability across the aviation value chain, reduce regulatory and tax burdens, and address infrastructure inefficiencies.
Although fuel prices are expected to ease in 2026, labour costs — airlines’ largest expense at 28 percent — will continue to put pressure on budgets due to inflation and a tight job market. IATA also pointed to ongoing regulatory costs, including the EU’s new cabin baggage decision.
Regional outlook for 2026
Europe is set to lead global performance next year, buoyed by strong low-cost carrier growth, despite air traffic control disruptions and the added cost of SAF mandates.
Latin America is projected to stabilise as carriers such as Azul emerge from restructuring, helping support long-haul traffic even as demand softens within the Americas.
Africa will continue to face minimal margin growth, with meaningful improvement unlikely until operating costs fall and GDP per capita increases.
The Middle East will maintain the highest profit per passenger globally. Supply chain bottlenecks have slowed new aircraft deliveries, but retrofit programmes and extended fleet cycles will help airlines keep capacity flexible.
North America, no longer the top-performing region, has been hit by tariffs, weaker domestic demand, and a shift toward premium travel. However, IATA expects a gradual rebound in 2026.
Asia-Pacific is forecast to reach a record load factor of 84.4 percent, though the risk of overcapacity remains. China and India continue to anchor the region’s rapid expansion, reinforcing APAC’s position as aviation’s fastest-growing market.
