More Traffic, Halved Profits For Airlines In 2026 - Industry Forecast

(MENAFN- Jordan Times) RIO DE JANEIRO, Brazil - Airlines are expecting higher passenger numbers in 2026 but half the profits of last year, according to forecasts released on Sunday at a conference in Brazil, as rising fuel costs fail to deter travellers.

The International Air Transport Association (IATA), which represents more than 370 airlines, estimates that its members will carry 5.1 billion passengers in 2026.

That is 2.4 per cent more than in 2025, which saw 4.98 billion passengers, according to a provisional estimate.

The 4-billion threshold was crossed in 2023.

But the growth will be accompanied by profitability at half last year's level, with losses for Middle Eastern airlines.

"War-related disruptions in the Middle East and rising fuel costs have shifted the outlook for airlines to the worse," IATA Director General Willie Walsh said in a statement.

"Profits will shrink from $45 billion in 2025 to $23 billion this year. And margins will shrink from 4.2 per cent to 2.0 per cent," he said, referring to the net margin.

According to IATA's calculations, net profit is expected to be $4.50 per passenger, half the 2025 figure.

"Under the circumstances, that shows resilience. But it won't even buy you a hot dog at most of the FIFA World Cup venues and it does not leave much of a buffer should other costs or taxes start rising," Walsh said.

'Fuel price shock'

Rising fuel costs, some of which are being reflected in ticket prices, have failed to deter people from travelling entirely.

IATA member airlines turnover is expected to rise by nine per cent this year to $1.165 billion.

"Airlines are bearing the brunt of the fuel price shock. While air fares are rising, airlines are still absorbing part of the hike in their bottom lines," the IATA said.

Profitability will vary across different regions of the world, according to the IATA's projections.

Middle Eastern airlines, which have traditionally had access to an abundant supply of fuel, are expected to face a difficult year, with net margins projected to turn negative.

For these airlines, including Emirates and Qatar Airways, "the immediate recovery path is likely to be driven more by pricing than by a rapid return of volumes," the IATA said.

But it is not concerned about demand, even as the Middle East war entered its 100th day on Sunday with no end in sight.

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