Airlines are forecast to achieve a combined net profit of USD41 billion next year (up from USD39.5b in 2025).
While this would set a new record, the net profit margin is expected to be unchanged at 3.9%, the International Air Transport Association says. Net profit per passenger is expected to remain steady at USD7.90 and passenger numbers are predicted to reach USD5.2 billion in 2026 (up 4.4% on 2025). Total industry revenues are expected to reach USD1.053 trillion in 2026. Planes are forecast to be more crowded, with IATA anticipating record high load factors of 83.8%. IATA director general Willie Walsh says profits are welcome as the industry faces rising costs from bottlenecks in the aerospace supply chain, geopolitical conflict, sluggish global trade, and growing regulatory burdens among them.
. . . Ticket Prices
Passenger ticket revenues are expected to reach USD751b in 2026 (up 4.8%). This growth will be driven by a 4.9% expansion of industry-wide revenue passenger kms (RPK). Yields, which reflect ticket prices, are expected to remain relatively flat while the passenger load factor is expected to set a new record. Ancillary and other revenues are forecast to rise by 5.5%, reaching USD145b. Ancillary services now account for nearly 14% of total revenue, up from 12%-13% pre-pandemic.
. . . Costs Stabilise
Fuel cost relief is offset by rising non-fuel pressures, but the broader slowdown in inflation is helping to stabilise the cost base. Fuel costs are expected to decline slightly (-0.3%) to USD252b. Non-fuel costs are forecast to be USD729b (+5.8%). Labour costs are now the largest cost component (28%) as wage growth continues to outpace inflation.
The regulatory cost burden on airlines is significant, says Walsh. While deregulation is being pursued in the US, European regulators have yet to act to make significant improvements in competitiveness. He warns that conflict continues to hamper airlines with significant costs. Airspace closures, interference with aircraft systems, and re-routing for both political and safety reasons are constraining operations and reducing efficiency.
