Global airline net profit to halve in 2026: from $45 billion to $23 billion due to rising fuel costs and Middle East conflict
Fuel costs will rise from $252 billion to $350 billion. Net profit margin will fall from 4.2% to 2%. Middle Eastern airlines will post aggregate losses, and carriers in other regions will also see lower than expected profitability.
As reported by CCTV+, the International Air Transport Association (IATA) said on Sunday that global airlines' aggregate net profit is expected to roughly halve this year, as escalating geopolitical tensions and conflicts in the Middle East continue to drive up jet fuel prices.
In its report, IATA forecasts that total net profit of global airlines will fall from $45 billion in 2025 to $23 billion this year, with net profit margin dropping from 4.2% in 2025 to 2%. Due to weak demand and operational disruptions, Middle Eastern airlines will incur aggregate losses, while carriers in other regions will also see lower than expected profitability.
The report also forecasts that jet fuel costs will rise from $252 billion in 2025 to $350 billion in 2026.
IATA Director General Willie Walsh said that the profitability of all airlines worldwide has been hit by the rapid rise in jet fuel prices. Although airlines are offsetting additional costs by adjusting ticket prices and improving efficiency, this is not enough to maintain profitability at last year's levels.
The International Air Transport Association (IATA) represents about 300 airlines, accounting for more than 80% of global air traffic. Jet fuel (kerosene) is the second largest expense for airlines after labor. Its price is directly tied to global oil prices, which have surged following the escalation of the Middle East conflict. Airlines can partially hedge risks through fuel derivatives, but a sharp price spike catches them off guard.
Aviation has always been a mirror of the global economy and politics. When war erupts in the Middle East, kerosene becomes more expensive — and flights become pricier. Airlines are forced to raise ticket prices, but passengers are not bottomless. Demand falls, margins shrink. As a result, an industry that was just starting to recover from COVID losses finds itself in turbulence again. And $23 billion in net profit is not a failure — it is a reminder of how fragile the air bridge between continents truly is.
