Global airline profits will drop sharply from an estimated $45 billion in 2025 to $23 billion in 2026, the International Air Transport Association (IATA) said in its latest financial outlook report.

IATA, however, said that African airlines are expected to remain profitable in 2026 despite the increasing global challenges.

A statement issued yesterday by IATA’s Director-General, Willie Walsh, said that the drop in the financial drop was mainly due to the impact of the Middle East conflict and soaring jet fuel prices.

According to IATA, global airlines’ net profit margin is expected to be two per cent in 2026, roughly half the previously projected 3.9 per cent in 2025.

Also, Walsh said that net profit per passenger transported is expected to be $4.5, half the $9.1 achieved in 2025.

Operating profit in 2026 is expected to be $48 billion (down from $76.4 billion in 2025) for a net operating margin of 4.1 per cent (down from 7.2 per cent in 2025).

Return on invested capital (ROIC) is expected to be 4.3 per cent (down from 6.6 per cent in 2025). This is below the 8.5 per cent estimated weighted average cost of capital.

Total industry revenues are expected to reach $1.165 trillion in 2026 (up 9.4 per cent on the $1.065 trillion in 2025).

The passenger load factor is forecast to continue to set record highs, with airlines expected to fill 84 per cent of all seats over the year. That is an improvement on 83.5 per cent in 2025.

Passenger numbers are expected to reach 5.1 billion in 2026 (up 2.4 per cent on 2025), while cargo volumes are expected to reach 71.7 million tonnes in 2026 (up 0.2 per cent on 2025).

However, IATA said Africa’s major hub airlines are witnessing strong passenger traffic growth as international flights increasingly bypass parts of the Middle East.

The development is creating fresh revenue opportunities for the continent’s leading carriers, particularly those with extensive connections between Africa, Europe and Asia.

Despite the increase in traffic, IATA cautioned that African airlines would face significant cost pressures that could limit earnings growth.

“The region’s profitability is expected to weaken as a result of cost-side vulnerabilities, particularly regarding the supply and price of fuel,” Walsh said.

Walsh added that high fuel costs remained a major concern for African carriers.
Globally, jet fuel prices are expected to surge by nearly 70 per cent this year, rising from an average of $90 per barrel in 2025 to $152 per barrel in 2026.

Fuel costs are projected to account for more than 31 per cent of airlines’ operating expenses worldwide, IATA said.

IATA noted that while African airlines stand to gain from the rerouting of global traffic, the financial benefits are likely to be concentrated among a handful of established hub carriers with strong international networks.

Also, IATA said fragmented operators across the continent are expected to struggle under the weight of rising operating costs and weaker financial positions.

The association identified several structural challenges hindering the growth of African aviation, including inadequate infrastructure, fragmented airspace management and limited cooperation among countries.

“Structural constraints continue. Weak infrastructure, fragmented airspace, and limited cross-border coordination reduce network efficiency and raise operating costs,” Walsh stated.

Globally, airlines are expected to generate revenues of $1.165 trillion in 2026, representing a 9.4 per cent increase over the previous year.