Airlines are expected to achieve a combined net profit of $41 billion in 2026, up from $39.5 billion in 2026, a new record, while the net profit transported per passenger is expected to be $7.90.
The Middle East is the strongest region in terms of net profit margin and profit per passenger. This performance attests to the difference a positive regulatory operating environment can make, and to the region’s strategic position as a global connecting hub, according to the IATA in a presentation to the media on Tuesday.
Passenger demand continues to be robust, driven by long-haul traffic and the expansion of hub carriers. Governments and airlines are doubling down on infrastructure investments to secure long-term growth. While geopolitical tensions remain a feature of the regional landscape, they are not expected to negatively impact growth, particularly as efforts to secure lasting peace continue.
Middle Eastern carriers are mitigating aircraft delivery delays through retrofit programs and fleet life extensions, though capacity growth will remain constrained in the near term.
At the same time, fuel costs are expected to decline slightly to $252 billion in 2026 (-0.3% from $253 billion in 2025). The consensus forecast is for crude oil prices to decline to $62/barrel Brent (-11.0% on $70/barrel in 2025). Jet fuel prices are only expected to decline by 2.4% from $90/barrel in 2025 to $88/barrel in 2026 as the crack spread widens.
The expiration of higher-cost hedges from 2025 should allow airlines to realize lower average prices that are closer to market levels. Fuel is set to account for 25.7% of total operating expenses, down from 26.8% in 2025.
Fuel efficiency gains are expected to be just 1.0% as supply chain issues continue to hamper fleet renewal and push the average aircraft age to over 15 years, the highest ever.
Factoring in industry growth, fuel consumption is expected to increase to 106 billion gallons in 2026 (+2.7% on 103 billion gallons in 2025).
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 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. 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," IATA's director general Willie Walsh.
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