Published on 08/06/2026 - 12:45 GMT+2•Updated 13:55

Air travel demand stays robust with rising revenues across the airline sector, yet profits are projected to halve in 2026 due to surging jet fuel prices affecting carriers globally, according to the International Air Transport Association (IATA).

This appears in the trade body's updated financial outlook, which represents 370 airlines covering 85% of worldwide air traffic.

Airlines globally are forecast to post a combined net profit of $23bn (€20bn) in 2026, down from a prior estimate of $41bn (€36bn) and about half the $45bn (€39bn) projected for 2025.

This occurs despite a record 5.1 billion passengers, up 2.4% from last year, and industry revenues hitting $1.165tn (€1.01tn), up 9.4%.

"War-linked disruptions in the Middle East and climbing fuel costs have hurt airline prospects," said Willie Walsh, IATA's Director General.

Operating expenses are meanwhile set to rise 13% to $1.12tn (€970bn) versus last year, as the fuel bill jumps nearly 40% to $350bn (€304bn) in 2026 from $252bn (€219bn) in 2025. Fuel is thus expected to make up nearly a third of operating costs.

Even with airlines absorbing some of the jet fuel price increase and pursuing efficiency gains, net profit margins are forecast to narrow from 4.2% in 2025 to 2.0%.

"While air fares are increasing, airlines keep absorbing part of the rise in their earnings," Walsh said. He added that "net profit per passenger is expected to drop to $4.50, half of last year's level", which "won't even buy you a hot dog at most FIFA World Cup venues," he noted, adding that if other costs or taxes rise, airlines have little buffer left.

Higher aircraft leasing and maintenance expenses, plus spending on cleaner fuels and carbon offsetting, are also set to pressure the industry. IATA cited slower global growth, rising inflation and weaker world trade as further sector challenges.

Regional comparison

The regional outlook varies widely. At the heart of the conflict, Gulf carriers face the largest financial hit. IATA expects them to move into losses amid weaker demand and operational issues. All other regions are forecast to stay profitable, though at reduced levels from the prior year.

Europe also faces major cost pressure from heavy reliance on Gulf jet fuel imports.

"While some of this is offset by a pre-crisis hedging ratio covering 70% of fuel needs, higher costs will emerge as hedges expire," IATA said.

European airlines have gained from some passengers choosing direct Europe-Asia routes that bypass Gulf hubs. Yet airspace limits over Russia keep disrupting operations, while slower economic growth and rising energy costs may curb consumer spending.

Airlines in Europe also confront growing costs from environmental rules, airport charges and air traffic control fees. Combined with recurring strikes in several countries, these factors could leave the region's carriers at a competitive disadvantage even after conditions stabilize.