The International Air Transport Association (IATA) released its latest financial outlook for the global airline industry, projecting a stabilization in profitability in 2026 despite ongoing challenges from supply chain bottlenecks, geopolitical conflicts, and rising operating costs.
The industry is forecast to achieve a record-setting combined net profit of $41 billion in 2026, an increase from the $39.5 billion expected in 2025. However, the net profit margin is expected to remain unchanged at 3.9%.
“Airlines have successfully built shock-absorbing resilience into their businesses that is delivering stable profitability,” said Willie Walsh, IATA’s Director General. “This $41 billion profit is extremely welcome news, considering the headwinds that the industry faces—rising costs from bottlenecks in the aerospace supply chain, geopolitical conflict, sluggish global trade, and growing regulatory burdens among them.”
| Metric | 2026 Forecast | Change from 2025 | Note |
| Total Net Profit | $41 billion | 3.8% | Sets a new record. |
| Operating Profit | $72.8 billion | 8.7% | Operating margin improves to 6.9% |
| Total Revenues | $1.053 trillion | 4.5% | First time exceeding $1 trillion. |
| Net Profit Per Passenger | $7.90 | Unchanged | |
| Return on Invested Capital (ROIC) | 6.8% | Unchanged | Remains below 8.2% |
| Passenger Numbers | $5.2 billion | +4.4% | |
| Load Factor | 83.8% | Sets a new record. | High load factors reflect capacity constraint. |
| Cargo Volumes | $71.6 million tonnes | 2.4% |
Despite the record profit, Mr. Walsh underscored that the industry’s profitability still falls short of covering its weighted average cost of capital (WACC), which is estimated to be 8.2% in 2026. The projected Return on Invested Capital (ROIC) remains at 6.8%, unchanged from 2025.
“Industry-level margins are still a pittance considering the value that airlines create,” Walsh noted. “Apple will earn more selling an iPhone cover than the $7.90 airlines will make transporting the average passenger. Airline margins are totally out of balance compared to engine and avionics manufacturers and many service suppliers.”
Walsh urged policymakers and industry partners to act to re-balance value chain profitability, reduce regulatory and tax burdens, and alleviate infrastructure inefficiencies to unlock the full economic power of air transport.
Total industry revenues are expected to grow by 4.5% to $1.053 trillion in 2026, outpacing the 4.2% growth in operating expenses.
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Passenger Revenue is forecast to reach $751 billion (+4.8% from 2025), driven by a 4.9% expansion in Revenue Passenger Kilometers (RPK) and a record passenger load factor of 83.8%, which is partially a consequence of aircraft supply shortages.
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Cargo Revenue is forecast at $158 billion (+2.1% from 2025). The air cargo sector demonstrated remarkable resilience, “buoyed in part by robust e-commerce and semiconductor shipments to support the boom in AI investments,” according to Walsh.
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Ancillary and other revenues are projected to hit $145 billion, now accounting for nearly 14% of total revenue.
On the cost side, a slight decline in fuel costs, driven by a forecast drop in crude oil prices to $62 per barrel, is expected to be offset by rising non-fuel pressures. Non-fuel costs are forecast to increase to $729 billion (+5.8% on 2025), largely due to labor costs becoming the largest component (28%) as wage growth outpaces inflation and supply chain issues drive up maintenance and lease costs.
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The total cost of environmental compliance, including CORSIA ($1.7 billion) and the incremental cost of Sustainable Aviation Fuel (SAF) ($4.5 billion), is expected to grow, with SAF volumes reaching $0.8% of total fuel consumption.
Supply chain challenges remain the primary constraint, hindering fleet renewal and pushing the average aircraft age to over 15 years—the highest ever. While aircraft deliveries are projected to increase, the order backlog continues to grow, signaling long-term capacity constraints.
Other constraints include a significant regulatory cost burden and persistent infrastructure inefficiencies globally, though planned air traffic management system renewal in the US offers a positive note. Geopolitical conflict also continues to add significant operational costs through airspace closures and re-routing.
“The stabilization of profitability, despite these formidable challenges, is a testament to the hard work and efficiency gains across the industry,” Walsh concluded. “The focus must now turn to re-aligning our economic model so that this vital industry can finally earn its cost of capital and better serve the growing global demand for air travel.”
