The International Air Transport Association (IATA) slashed its 2026 global airline profit forecast by nearly half. Net profit will drop to $23 billion from the earlier projection of $41 billion. The collapse is driven by war-related disruptions in West Asia and a historic surge in jet fuel prices.
IATA Director General Willie Walsh said Gulf carriers face operational uncertainty after airspace shutdowns. Airlines in the region will collectively post losses. All other regions will still turn profits but at sharply reduced levels. Passenger load factor will hit a record 84% in 2026, up from 83.5% in 2025. Total industry revenue will rise 9.4% to $1.16 trillion.
Fuel costs will jump 40% to $350 billion in 2026. Brent crude is projected at $95 per barrel, up 37% from 2025. Jet fuel will average $152 per barrel, a 70% increase. The crack spread—the premium for jet fuel over crude—will reach an unprecedented $57 per barrel. Walsh warned that airlines are absorbing part of the fuel price shock, squeezing net profit per passenger to $4.50, half of last year’s figure.
Budget airlines are most vulnerable. Spirit Airlines already collapsed in May 2026. Walsh expects more insolvencies and mergers as carriers drop loss-making routes. Airfares have surged since the Iran war began and are unlikely to fall soon. Supply chain delays from Boeing, Airbus, and engine makers add $11 billion in annual costs, further pressuring margins.
IATA remains committed to the 2050 net-zero emissions target but admits progress on sustainable fuels has stalled. The association represents 370 airlines that account for 85% of global air traffic.
