The global representative body for the airline industry, the International Air Transport Association (IATA), has issued its financial outlook for the sector for next year. It is expected that airline profitability will stabilise, despite the continuation of supply-chain issues.

“Airlines are expected to generate a 3.9% net margin and a $41-billion [net] profit in 2026,” reported IATA director-general Willie Walsh. “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.”

IATA forecast that airlines will achieve an operating profit of $72.8-billion next year, an increase from the $67-billion for this year. This will deliver a net operating margin of 6.9%, compared with this year’s 6.6%. The return on invested capital is forecast to be 6.8%, the same as for this year. The weighted average cost of capital is expected to be 8.2% in 2026. Total industry revenues next year are predicted to be $1.05-trillion, a 4.5% rise over the expected 2025 figure of $1.01-trillion.

“Industry-level margins are still a pittance considering the value that airlines create by connecting people and economies,” he highlighted. “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 make transporting the average passenger. And even within the air transport value chain, airline margins are totally out of balance, particularly when compared to margins of engine and avionics manufacturers and many of our service providers. Imagine the additional power that airlines could bring to economies if we could re-balance value chain profitability, reduce regulatory and tax burdens, and alleviate infrastructure inefficiencies.”  

The number of passengers carried is forecast to total 5.2-billion next year, which is a 4.4% increase over this year. Load factors are predicted to set a new record in 2026, at 83.8%. Air cargo volumes will probably reach 71.6-million tons, which is a 2.4% rise compared with this year.

“The resilience in air cargo has been particularly impressive,” Walsh affirmed. “As trade flows adapt to a protectionist US tariff regime, air cargo has been the hero of global trade buoyed in part by robust e-commerce and semiconductor shipments to support the boom in AI investments. Notably, air cargo enabled front-loading to deliver products ahead of tariff deadlines, and it flexibly accommodated demand surges as tariffed goods normally destined for the US found new markets. The critical role of air cargo is front and centre as the global economy adjusts to new realities.”

Regarding Africa, the forecast net profit for the region’s airlines next year is $200-million, which is the same as that estimated for this year. The net profit per passenger in 2026 is expected to be $1.40, a slight increase from the estimated $1.30 for 2025. The net margin for African airlines next year is predicted to be 1.1%, compared with the 1% for this year. Passenger demand in 2026 is forecast to increase by 6%, and capacity by 5.7%.

“Low GDP per capita across much of the continent limits discretionary spending, making air travel highly price sensitive and restricting growth potential,” pointed out IATA. “Demand is further constrained by visa restrictions, restrictive bilateral agreements, and high passenger charges. Moreover, African carriers face the highest unit costs globally …. Until these constraints ease, Africa’s airline industry will operate with thin margins and limited resilience, even as traffic expands faster than the global average.”