Airlines face profit slump as fuel costs surge, IATA says

The International Air Transport Association (IATA) has significantly downgraded its outlook for the airline industry, warning that carriers, particularly low-cost operators, are approaching a period of financial strain, Bloomberg reported.

According to IATA, global airline net profits for 2026 are now expected to reach $23 billion, sharply down from the previous forecast of $41 billion.

The association attributed the weaker outlook to a combination of rising aviation fuel prices and ongoing disruptions to air traffic in the Middle East. Fuel costs alone are projected to surge by nearly 40% next year, reaching approximately $350 billion.

IATA Director General Willie Walsh said that restrictions linked to military conflicts in the Middle East, together with higher fuel prices, have significantly ухудшили финансовые перспективы авиакомпаний. He emphasised that smaller carriers are facing the greatest pressure under current conditions.

Despite these challenges, demand for air travel is expected to continue growing. IATA forecasts that global passenger traffic will increase by 2.4% to 5.1 billion people, while aircraft load factors are projected to rise to 84%.

However, the association stressed that rising demand will not be sufficient to offset the sharp increase in operating costs. It also pointed to the limited production of new aircraft as an additional constraint weighing on the industry’s recovery and expansion.

By Tamilla Hasanova