The International Air Transport Association (IATA) has predicted that the global airline sector will sustain a steady net profit margin of 3.9% in 2026, leading to a total net profit of $41 billion. This projection is made against a backdrop of ongoing supply chain challenges and increasing operational costs. Despite these potential hurdles, the airline industry is expected to secure an operating profit of $72.8 billion, with a net operating margin that increases to 6.9%.

Total revenue for the industry is forecasted to reach $1.053 trillion, which is a 4.5% increase compared to 2025. The number of passengers is also expected to rise to 5.2 billion, achieving record load factors at 83.8%. Rising cargo volumes are anticipated as well, predicted to hit 71.6 million tonnes.

Willie Walsh, IATA’s Director General, emphasized the resilience of the industry, stating, “Airlines have successfully built shock-absorbing resilience into their businesses that is delivering stable profitability.”

However, the sector faces challenges such as a return on invested capital (ROIC) of 6.8%, which is still below the weighted average cost of capital (WACC) at 8.2%. Walsh pointed out, “Industry-level margins are still a pittance considering the value that airlines create by connecting people and economies.”

Additionally, while fuel costs are expected to see a slight decline, with crude oil prices estimated to drop to $62 per barrel, non-fuel costs are rising, impacted by labor and maintenance due to aging aircraft.

The regulatory landscape remains complex, particularly in Europe, where the momentum for deregulation has stalled.

Moving forward, the industry must navigate these constraints while also seizing opportunities such as a weaker US dollar, which could prove beneficial for airlines based outside the USD sphere. Despite these challenges, the airline sector is a vital component of the global economy, supporting 87 million jobs worldwide.