The International Air Transport Association (IATA) has lowered its profit forecast for the global aviation industry for 2026. The organization now expects a net profit of $23 billion, down from the previously projected $41 billion. The primary drivers are a sharp rise in jet fuel prices and altered flight paths due to the military conflict involving Iran, which have intensified financial pressure on air carriers.
IATA estimates that the industry’s total fuel bill could rise to $350 billion in 2026, up from $252 billion the previous year. Consequently, fuel costs are expected to approach one-third of total industry operating expenses. Profit per passenger is also projected to nearly halve, falling to $4.50. IATA Director General Willie Walsh warned that rising fuel costs could push a number of smaller airlines into bankruptcy.
Carriers from the Persian Gulf – including Emirates, Qatar Airways, and Etihad Airways – are considered most vulnerable to the conflict’s impact, as airspace restrictions force them to fly longer routes and consume more fuel. Meanwhile, airlines operating direct flights between Asia and Europe – such as Lufthansa Group, Air France-KLM, Singapore Airlines, and Cathay Pacific – could strengthen their market positions as demand shifts. Despite rising ticket prices, IATA notes that demand remains stable, particularly in the premium and business travel segments.