The International Air Transport Association (IATA) has projected about 50 per cent drop in airlines profit globally, from $45 billion recorded in 2025 to $23 billion in 2026.

The figure was contained in the latest outlook released at the weekend by IATA, which attributed the decline in projected profit to escalating conflict in the Middle East and soaring fuel prices which are squeezing carriers worldwide.

According to the international body, profit margins are also expected to shrink from 4.2 per cent to 2.0 per cent.

Although total industry revenues are projected to rise by 9.4 per cent to $1.165 trillion, soaring operating costs, driven largely by a 70 per cent jump in jet fuel prices—are expected to outpace revenue growth.

Commenting on the development, Director General of IATA, Willie Walsh said, “War-related disruptions in the Middle East and rising fuel costs have shifted the outlook for airlines to the worse. Globally, airlines are expected to see profitability halve compared to 2025. Profits will shrink from $45 billion in 2025 to $23 billion this year. And margins will shrink from 4.2% to 2.0%. All airline bottom lines are suffering from the rapid 70% rise in jet fuel prices. Some of the additional cost is being recuperated by adjusting prices and improving efficiency, but it will not be sufficient to maintain profitability at the previous year’s level. Smaller carriers that started the year with weak balance sheets are certainly struggling.”

Explaining further, the DG noted, “At the regional level, all are in the black but with sharply reduced financial performance, with the exception of the Middle East. The Gulf carriers face operational uncertainty following a near-complete shutdown of airspace at the outbreak of the war. These carriers are doing an amazing job maintaining connectivity, but major financial impacts are unavoidable.”

Besides, and even in the best of times, the airline industry as a whole suffers from low margins and returns below the cost of capital. The oil price shock has tested airline financial resilience as net margins have been squeezed to 2.0% globally.

“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. Net profit per passenger is expected to fall to $4.50, half of what it was last year. 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 buffer should other costs or taxes start rising,” Walsh added.

For Africa, IATA expects profitability to weaken sharply, with net profits declining to just $100 million in 2026 from $300 million in 2025.

Although some African hub carriers are benefiting from traffic rerouted away from the Middle East, high fuel costs, infrastructure limitations and weak balance sheets are expected to constrain earnings across the continent.

The association also warned that aircraft delivery delays, supply chain disruptions, inflationary pressures and geopolitical uncertainty could further challenge the industry’s recovery, even as demand for air travel remains strong and passenger confidence stays high.

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