On the 9th of December, 2025, the International Air Transport Association (IATA) released the latest financial outlook for the global airline industry. Whilst supply chain issues still persist, the overall statistics reveal a stabilisation of profitability, and an estimated 3.9% net margin to be generated in 2026.
A Summary of the Report
Within IATA’s report, a range of highlights promise high hopes for the global airline industry in 2026. For example, passenger numbers are expected to reach 5.2 billion, up 4.4% on 2025, whilst cargo volumes are estimated to increase by 2.4% by rising to 71.6 million tonnes. Over the course of 2026, airlines should fill 83.8% of all seats, and the total industry revenue is hoped to increase by 4.5% by the end of the year, accumulating in $1.053 trillion.
Willie Walsh, IATA’s Director General, shared:
“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.”
However, despite strong performances, the airline industry collectively still does not generate earnings that cover its cost of capital. European regulators have yet to ease regulatory burdens, unlike in the US where deregulations is being actively pursued, and this creates a high cost burden. Additionally, the backlog in aircraft orders may continue to grow, and it does not seem as though infrastructure constraints will ease just yet.
The Regional Roundup
Furthermore, IATA released the regional roundup of Net Profit Per passenger in 2025 and 2026, as well the statistics for 2026 Demand (RPK) and 2026 Capacity (ASK). The strongest region for net profit margin and profit per passenger was the Middle East, though North America and Europe continue to deliver stable profit and strong financial performance.
In Latin America, currency fluctuations mean cost management and profitability may be challenged in the new year, whilst overcapacity remains a challenge with Asia Pacific. However, it also remains the largest contributor to global traffic growth, projected to reach 84.4% next year. As for Latin America, traffic growth is still healthy due to strong intra-regional connectivity.
Finally, the report noted that Africa’s airline industry is expected to continue operating within thin margins for 2026, despite traffic expansion faster than the global average, due to visa restrictions, restrictive bilateral agreements, and high passenger charges. Costs of operation are high in Africa from fuel costs, fragmented markets, and an average corporate tax rate of 28&, which is the highest among all regions. Nevertheless, IATA’s predictions for 2026 remain largely positive.
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