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IATA: Airlines forecast more passengers but half the profits in 2026
🇵🇦 Panama /Economy & Trade

IATA: Airlines forecast more passengers but half the profits in 2026

From TVN Panamá · () Spanish

Translated from Spanish, summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • Airlines anticipate carrying more passengers in 2026 but expect profits to halve compared to 2025.
  • The International Air Transport Association (IATA) projects 5.1 billion passengers globally, a 2.4% increase.
  • Rising fuel costs and geopolitical instability, particularly in the Middle East, are impacting airline profitability.

The global airline industry is bracing for a year of increased passenger traffic but diminished financial returns in 2026. The International Air Transport Association (IATA), representing 85% of global air traffic, forecasts that its member airlines will transport 5.1 billion passengers. This figure represents a modest 2.4% rise from 2025 levels.

The Middle East disruptions due to the war and the increase in fuel costs have turned the prospects for airlines in a bad direction.

— Willie WalshExplaining the negative impact of current events on the airline industry.

However, this growth comes at a cost. IATA projects that airline profits will be cut nearly in half compared to the previous year. Net profits are expected to fall from $45 billion in 2025 to $23 billion in 2026, shrinking net margins from 4.2% to 2.0%. This squeeze on profitability is attributed to several factors, including the escalating price of fuel and ongoing geopolitical disruptions, particularly the conflict in the Middle East.

Profits are going to contract, from 45 billion dollars in 2025 to 23 billion this year. And net margins will reduce from 4.2% to 2.0%.

— Willie WalshDetailing the projected decrease in airline profits and margins.

Willie Walsh, IATA's Director General, acknowledged the challenging outlook, stating, "Profits are going to contract... And net margins will reduce." He noted that airlines are absorbing a significant portion of the increased fuel costs, even as ticket prices rise. Despite these headwinds, Walsh emphasized the industry's resilience, particularly when considering the impact of the Middle East conflict. He indicated that excluding this regional instability, the industry would see a more robust 3.5% growth.

I do not see this as a crisis.

— Willie WalshComparing the current challenges to the COVID-19 pandemic.

Profitability is expected to vary significantly by region. Airlines in the Middle East, which historically benefited from readily available local fuel, are predicted to have a particularly difficult year. Their net margin, which was the highest globally in 2025 at 9.4%, is forecast to turn negative at -6.1% in 2026. Despite the uncertainties, IATA remains confident in passenger demand, noting that average ticket prices have fallen by 26% over the past decade.

If we leave aside the incidence of the Middle East, we expect a growth of 3.5%.

— Willie WalshHighlighting potential growth if regional conflicts were absent.
DistantNews Editorial

Originally published by TVN Panamá in Spanish. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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