Airlines to Post Record $41B Profit in 2026: IATA

Geneva, Dec 9 (PTI) The global airline industry is projected to rake in a record net profit of USD 41 billion in 2026, higher than USD 39.5 billion expected this year, according to the International Air Transport Association (IATA).

The airlines' industry body on Tuesday said India and China will drive the passenger demand in the Asia Pacific region, where net profit is forecast at USD 6.6 billion and the net profit per passenger at USD 3.20 in 2026.

Next year, globally, the passenger load factor is pegged at a record 83.8 per cent while the net profit margin is expected at 3.9 per cent even as supply chain issues persist.

Announcing the financial outlook for 2026 in Geneva on Tuesday, IATA said total industry revenues are expected to reach USD 1.053 trillion in 2026, up from USD 1.008 trillion anticipated in 2025. The revenues next year are anticipated to outpace operating expenses, which are pegged at USD 981 billion.

The net profit per passenger transported is expected to be USD 7.90 in 2026, unchanged from 2025 and lower than USD 8.50 recorded in 2023.

The International Air Transport Association (IATA) represents around 360 airlines accounting for over 80 per cent of the global air traffic.

"Airlines are expected to generate a 3.9 per cent net margin and a USD 41 billion profit in 2026... airlines have successfully built shock-absorbing resilience into their businesses that is delivering stable profitability," IATA Director General Willie Walsh said.

The number of passengers is projected to touch 5.2 billion next year, around 4.4 per cent more than this year.

In recent years, the airline industry has been grappling with multiple headwinds, including persisting supply chain woes, delayed aircraft deliveries and geopolitical uncertainties.

IATA noted that the 2026 cost outlook points to a more balanced environment as the broader slowdown in inflation is helping to stabilise the cost base.

"Fuel efficiency gains are expected to be just 1.0 per cent as supply chain issues continue to hamper fleet renewal and push the average aircraft age to over 15 years, the highest ever.

"Factoring in industry growth, fuel consumption is expected to increase to 106 billion gallons in 2026 (+2.7 per cent on 103 billion gallons in 2025)," it said.

The fuel costs are expected to decline slightly to USD 252 billion in 2026 lower than USD 253 billion in 2025.

"Passenger ticket revenues are expected to reach USD 751 billion in 2026 (+4.8 per cent on USD 716 billion in 2025) ... yields are expected to remain relatively flat while the passenger load factor is expected to set a new record at 83.8 per cent as new aircraft remain in short supply," IATA said.

Air cargo volumes are set to rise to 71.6 million tonnes next year, with Walsh saying air cargo has been the hero of global trade, buoyed in part by robust e-commerce and semiconductor shipments to support the boom in AI (Artificial Intelligence) investments.

According to IATA, supply chain issues, regulatory cost burden, infrastructure constraints and conflict continue to hamper airlines.

"Airspace closures, GNSS interference and re-routing for both political and safety reasons are constraining operations and reducing efficiencies," it said.