IATA Sees Stabilized Profitability for Airlines in 2026 – But It’s Not Enough

 The International Air Transport Association (IATA) has released its latest financial outlook for the global airline industry, showing a stabilization of profitability even as supply chain issues persist. 

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

Here are some highlights of the airline outlook:

• Operating profit in 2026 is expected to be $72.8 billion (up from $67.0 billion in 2025) for a net operating margin of 6.9% (improved on the 6.6% expected for 2025).
• Return on invested capital (ROIC) is expected to be 6.8% (unchanged from 2025). Despite deleveraging and improved operating profitability, ROIC is expected to remain below the weighted average cost of capital (WACC) estimated to be 8.2% in 2026.
• Total industry revenues are expected to reach $1.053 trillion in 2026 (up 4.5% on the $1.008 trillion expected revenues in 2025).
• Load factors are forecast to continue to set record highs with airlines expected to fill 83.8% of all seats over the year 2026.
• Passenger numbers are expected to reach 5.2 billion in 2026 (up 4.4% on 2025).
• Cargo volumes are expected to reach 71.6 million tonnes in 2026 (up 2.4% on 2025).

“Airlines are expected to generate a 3.9% net margin and a $41 billion profit in 2026. That’s extremely welcome news considering the headwinds that the industry faces — rising costs from bottlenecks in the aerospace supply chain, geopolitical conflict, sluggish global trade, and growing regulatory burdens among them. Airlines have successfully built shock-absorbing resilience into their businesses that is delivering stable profitability,” said Willie Walsh, IATA’s Director General.

Despite the strong performance of airlines in the face of a “changing and challenging operating environment,” IATA says the fact that the airline industry collectively does not generate earnings that cover its cost of capital remains an issue to be resolved. 

“Industry-level margins are still a pittance considering the value that airlines create by connecting people and economies,” Walsh added. “They stand at the core of a value chain that underpins nearly 4% of the global economy and supports 87 million jobs. Yet Apple will earn more selling an iPhone cover than the $7.90 airlines will make transporting the average passenger.