By: Economy Middle east

Global airlines are expected to achieve a combined total net profit of $41 billion in 2026, up from $39.5 billion in 2025. While this would set a new record, the net profit margin is expected to be unchanged from 2025 at 3.9 percent, said the International Air Transport Association (IATA) in its latest financial outlook for the global airline industry.

Net profit per passenger transported is expected to be $7.90, below the 2023 high of $8.50, and unchanged from 2025. Meanwhile, operating profit in 2026 is expected to reach $72.8 billion, up from $67.0 billion in 2025, for a net operating margin of 6.9 percent.

“Airlines are expected to generate a 3.9 percent 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,” said Willie Walsh, IATA’s Director General.

Air cargo’s performance defies predictions

While the strong performance of global airlines in the face of a changing and challenging operating environment is impressive, the fact that the airline industry collectively does not generate profits that cover its cost of capital remains an issue to be resolved.

“Industry-level margins are still a pittance considering the value that airlines create by connecting people and economies. They stand at the core of a value chain that underpins nearly 4 percent of the global economy and supports 87 million jobs. Yet Apple will earn more selling an iPhone cover than the $7.90 airlines will 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 suppliers. 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,” added Walsh.

Air cargo’s performance is of particular interest as it has defied many predictions of gloom to hold its own amid rapidly changing trading conditions.

“The resilience in air cargo has been particularly impressive. As trade flows adapt to a protectionist U.S. 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 U.S. found new markets. The critical role of air cargo is front and center as the global economy adjusts to new realities,” said Walsh.

Global airline revenues to grow by 4.5 percent to $1.053 trillion

Overall, global airline revenues are expected to grow by 4.5 percent to $1.053 trillion. This is expected to outpace operating expense growth of 4.2 percent to $981 billion, leading to a $1.5 billion improvement in industry-wide net profitability in 2026.

The report also noted that macro-economic factors impacting airlines are mixed for 2026. On the positive side, GDP growth is expected to be largely stable at 3.1 percent and inflation is expected to ease slightly to 3.7 percent. World trade growth is, however, expected to be anemic at 0.5 percent.

Meanwhile, the 2026 cost outlook points to a more balanced environment. Fuel relief is offset by rising non-fuel pressures, but the broader slowdown in inflation is helping to stabilize the cost base.

Middle East leads

Airlines in the Middle East are expected to post a net profit of $6.8 billion in 2026, up from the expected $6.6 billion in 2025. The Middle East is the strongest region in terms of net profit margin and profit per passenger. This performance attests to the difference a positive regulatory operating environment can make, and to the region’s strategic position as a global connecting hub.

Passenger demand continues to be robust, driven by long-haul traffic and the expansion of hub carriers. Governments and airlines are doubling down on infrastructure investments to secure long-term growth. While geopolitical tensions remain a feature of the regional landscape, they are not expected to negatively impact growth, particularly as efforts to secure lasting peace continue.

Middle Eastern carriers are mitigating aircraft delivery delays through retrofit programs and fleet life extensions, though capacity growth will remain constrained in the near term.