IATA: Airlines profitability stabilizes with an expected net margin of 3.9 percent in 2026

• The International Air Transport Association (IATA) expects global airlines to achieve net profits of $41 billion in 2026, maintaining a net margin of 3.9 percent. This reflects a steady financial recovery despite ongoing challenges such as supply chain disruptions, geopolitical tensions, and regulatory burdens.
• Passenger numbers are expected to reach 5.2 billion, with load factors reaching a record high of 83.8%. Air cargo volumes are expected to grow to 71.6 million tons, supported by strong demand for e-commerce and semiconductors. Total industry revenues will rise by 4.5% to $1.053 trillion.
• Operating profits are expected to grow to $72.8 billion, but the return on invested capital (6.8%) will still be less than the estimated cost of capital (8.2%). Fuel costs are expected to decline slightly, although non-fuel costs such as labor, maintenance and compliance will continue to rise.

The International Air Transport Association (IATA) has released its latest financial forecast for the global airline industry which shows profitability stabilizing even as supply chain issues persist. Highlights include:

Airlines are expected to generate a total net profit of US$41 billion in 2026 (up from US$39.5 billion in 2025). While this would set a new record, the net profit margin is expected to remain unchanged from 2025 at 3.9 percent. Net profit per passenger carried is expected to be $7.90 (down from the 2023 high of $8.50, and unchanged from 2025).

Operating earnings in 2026 are expected to be $72.8 billion (compared to $67.0 billion in 2025) with a net operating margin of 6.9 percent (an improvement over the 6.6 percent expected for 2025).

Return on invested capital (ROIC) is expected to reach 6.8 percent (unchanged from 2025). Despite deleveraging and improving operating profitability, return on investment is expected to remain below the weighted average cost of capital (WACC) of 8.2 percent in 2026.

Total industry revenue is expected to reach $1.053 trillion in 2026 (an increase of 4.5 percent from the expected revenue of $1.008 trillion in 2025).

Load factors are expected to continue to reach record levels, with airlines expected to fill 83.8 percent of all seats through 2026.

The number of passengers is expected to reach 5.2 billion in 2026 (an increase of 4.4 percent from 2025).

Shipping volume is expected to reach 71.6 million tons in 2026 (an increase of 2.4 percent from 2025).

“Airlines are expected to achieve a net margin of 3.9 percent and profits of $41 billion in 2026,” said Willie Walsh, Director General of the International Air Transport Association. “This is very welcome news given the headwinds the industry is facing – rising costs due to bottlenecks in the aviation supply chain, geopolitical conflicts, slowdown in global trade, and increasing regulatory burdens among them. Airlines have succeeded in building shock-absorbing resilience into their businesses that is delivering stable profitability.”

While the strong performance of airlines in the face of a changing and challenging operating environment is impressive, the fact that the airline industry collectively does not generate profits that cover its cost of capital remains an issue to be resolved.

“Industry-wide margins are still slim given the value airlines create by connecting people and economies. They stand at the heart of a value chain that underpins nearly 4 percent of the global economy and supports 87 million jobs. However, Apple will earn more from selling an iPhone case than airlines will earn from transporting the average passenger, which is $7.90. Even within the air transport value chain, airline margins are completely unbalanced, especially when compared to those of engine and avionics manufacturers. And many of our services. “Imagine the additional strength airlines could bring to economies if we could rebalance value chain profitability, reduce regulatory and tax burdens, and mitigate infrastructure inefficiencies,” Walsh said.

Air cargo’s performance is of particular interest because it has defied many gloomy forecasts to maintain its position amid rapidly changing business conditions.

“The resilience of air freight has been particularly impressive. As trade flows have adapted to the protectionist US tariff regime, air freight has become a champion of global trade, supported in part by e-commerce shipments and robust semiconductors to support the surge in AI investments. Notably, air freight has enabled early loading of product deliveries before tariff deadlines, flexibly accommodating increases in demand as tariff-laden goods normally destined for the US find new markets. It plays a critical role. Air freight has a central place at the forefront of the global economy and is “adapting to new realities,” Walsh said.