AirlinesFace Profit Halving Despite Rising Passenger Numbers in 2026

Airlines anticipate an increase in passenger numbers this year but project profits to be nearly half of 2025 levels, driven by persistently high fuel costs that have not curtailed travel demand, according to industry forecasts released Sunday.

The International Air Transport Association (IATA) forecasts its 370 member carriers—representing 85% of global air traffic—will transport 5.1 billion passengers in 2026, a 2.4% rise from the 4.98 billion estimated for 2025.air travel surpassed four billion passengers in 2023.

When questioned by media about the Middle East conflict’s impact relative to the 2020-2021 COVID-19 crisis, IATA Director General Willie Walsh stated: “I do not view this as a crisis.”

“The industry is on track for growth,” he added. “Excluding Middle Eastern factors, the forecast indicates a 3.5% expansion,” Walsh clarified.

However, this growth will coincide with profitability dropping to half of 2025’s levels, with Middle Eastern airlines projected to incur losses.

“Disruptions from the Middle East conflict and escalating fuel prices have worsened the outlook for airlines,” Walsh emphasized in a statement.

“Profits are projected to fall from $45 billion in 2025 to $23 billion this year, with net margins shrinking from 4.2% to 2.0%,” Walsh noted, referencing net margins.

IATA calculations estimate net profit at $4.50 per passenger—half the 2025 rate.

“This resilience is significant, yet $4.50 per passenger won’t cover even a basic meal at most FIFA World Cup venues, leaving minimal room for unexpected cost increases,” Walsh remarked.

– Fuel Cost Impact –

Rising fuel expenses—which are partially passed to consumers via higher ticket prices—are expected to boost IATA member airline revenues by 9% to $1.165 trillion this year.

“Airlines are disproportionately affected by the fuel price crisis. While fares rise, carriers absorb a substantial share of these increases in their operating costs,” IATA reported.

Profitability will differ regionally, per IATA projections.

Middle Eastern carriers, historically reliant on affordable fuel, face a challenging year, with net margins expected to turn negative. This includes airlines like Emirates and Qatar Airways.

“Their recovery is likely to hinge more on pricing strategies than volume rebounds,” IATA stated.

European airlines are forecast to be the most profitable (3.1% net margin), followed by North America (2.5%) and Asia-Pacific (2.1%).

Despite geopolitical volatility and unpredictable war duration, IATA remains confident in demand. The organization highlighted that average ticket prices had dropped 26% over the past decade.

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