The global airline industry is facing a dramatic profit slump, with net earnings expected to fall by roughly half compared to previous forecasts. The International Air Transport Association (IATA) now projects a combined net profit of $23 billion for 2026, down from an earlier estimate of $41 billion and about half of the $45 billion recorded in 2025.
The sharp revision is driven primarily by a 70% surge in jet fuel prices, which has pushed fuel’s share of operating costs from 25.4% to 31.4%. IATA’s latest outlook warns that only carriers in the Middle East are expected to post a net loss this year, while all other regions remain profitable but significantly weaker.
Passenger numbers are still rising — IATA forecasts 5.1 billion travelers in 2026, up 2.4% from 2025 — and load factors are set to hit a record 84%. Yet the revenue per passenger is plummeting. Net profit per passenger is expected to drop to just $4.50, half of the $9.10 earned last year.
Fuel shock hits margins and capital returns
The cost of jet fuel has risen nearly 40% in 2026 alone, and airlines are struggling to pass on the full increase to customers. Willie Walsh, IATA’s director general, said that while carriers are adjusting prices and improving efficiency, it is not enough to maintain 2025 profitability levels. Smaller airlines with weak balance sheets are particularly vulnerable.
Return on invested capital (ROIC) is forecast at 4.3% for 2026, down from 6.6% in 2025. IATA noted in a statement that this gap “re-emphasizes the structural weakness of the airline industry, where profitability shocks quickly reduce capital efficiency.”
Middle East carriers under siege
The worst-hit region is the Middle East, where carriers face operational uncertainty after the near-total closure of airspace during the outbreak of war. Walsh acknowledged that Gulf carriers are doing an outstanding job maintaining connectivity, but the financial impact is unavoidable. They are the only region expected to report a net loss in 2026.
Globally, all other regions remain profitable but with much thinner margins. Airlines in North America, Europe, and Asia-Pacific will still generate positive results, but at levels well below earlier expectations.
SAF production falls far short of targets
Sustainable aviation fuel (SAF) production is also failing to keep pace with regulatory goals. IATA estimates global SAF output will reach about 2.4 million tonnes in 2026, covering just 0.8% of total jet fuel demand. The EU’s ReFuelEU Aviation regulation requires a 2% SAF blend from 2025, rising to 70% by 2050, but actual supply remains negligible.
Walsh criticized the lack of government incentives and oil industry interest. “The current energy shock should drive renewable energy development, including the SAF we need. But so far, neither this shock, nor the need for energy independence, job creation, or climate mitigation, has translated into the incentives needed to create a real SAF production system,” he said.
Źródło: WNP.PL, Fot. Piotr Mitelski / Shutterstock
