The International Air Transport Association (IATA) has projected that the global airline industry will maintain a stable net profit margin of 3.9% in 2026, with a total net profit of $41 billion. This forecast comes amidst persistent supply chain issues and rising operational costs. Despite these challenges, airlines are expected to achieve an operating profit of $72.8 billion, reflecting a net operating margin increase to 6.9%.
Total industry revenues are anticipated to reach $1.053 trillion, marking a 4.5% increase from 2025. Passenger numbers are expected to rise to 5.2 billion, with load factors setting record highs at 83.8%. Cargo volumes are also projected to grow, reaching 71.6 million tonnes. Willie Walsh, IATA’s Director General, highlighted the resilience of airlines, stating, “Airlines have successfully built shock-absorbing resilience into their businesses that is delivering stable profitability.”
However, the industry still faces hurdles, including a return on invested capital (ROIC) of 6.8%, which remains below the weighted average cost of capital (WACC) of 8.2%. Walsh noted, “Industry-level margins are still a pittance considering the value that airlines create by connecting people and economies.”
Fuel costs are expected to decline slightly, with crude oil prices forecasted to drop to $62 per barrel. Non-fuel costs, however, are set to rise, driven by labour expenses and maintenance costs due to an ageing fleet. The regulatory environment also poses challenges, particularly in Europe, where deregulation efforts have stalled.
Looking ahead, the industry must navigate these constraints whilst capitalising on opportunities such as a weaker US dollar, which could benefit non-USD-based airlines. Despite the obstacles, the airline sector remains a crucial component of the global economy, supporting 87 million jobs worldwide.
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