GENEVA: Global airlines are expected to set a new record of a combined total net profit of US$41 billion (US$1=RM4.11) in 2026, up from US$39.5 billion this year, while the net profit margin is expected to remain unchanged from 2025 at 3.9 per cent.
According to the Geneva-based International Air Transport Association (IATA), operating profit is expected to be higher at US$72.8 billion next year from US$67 billion in 2025, for a net operating margin of 6.9 per cent, which is an improvement of 6.6 per cent expected for 2025.
Overall revenues are expected to grow by 4.5 per cent to US$1.05 trillion, outpacing operating expense growth of 4.2 per cent to US$981 billion, leading to a US$1.5 billion improvement in industry-wide net profitability in 2026.
Meanwhile, net profit per passenger transported is expected to be below US$7.90 in 2026, unchanged from this year, with the Middle East region expected to hover at US$28.6, Europe (US$10.9), North America (US$9.8), Latin America (US$5.7), Asia-Pacific (US$3.2), and Africa at US$1.3.
IATA director general Willie Walsh told a global media briefing on Tuesday that the financial outlook is extremely welcoming news, considering the headwinds that the industry faces - rising costs from the bottlenecks in the aerospace supply chain, geopolitical conflict, sluggish global trade, and growing regulatory burdens.
Walsh said the projection for record profits next year is due to the airlines having successfully built shock-absorbing resilience into their businesses, which is delivering stable profitability.
According to the IATA, the macroeconomic factors impacting airlines are mixed for 2026.
On the positive side, the association said gross domestic product (GDP) growth is expected to be largely stable at 3.1 per cent and inflation is expected to ease slightly to 3.7 per cent, while world trade growth is expected to be anemic at 0.5 per cent.
IATA said passenger ticket revenues are expected to reach US$751 billion in 2026, primarily driven by a 4.9 per cent expansion of industry-wide revenue passenger kilometres (RPK) expected next year.
Ancillary and other revenues are projected to rise by 5.5 per cent to US$145 billion, while cargo revenue is forecast to reach US$158 billion in 2026, driven by continued growth in cargo volumes and e-commerce volumes.
"Overall, the 2026 cost outlook points to a more balanced environment with fuel relief offset by rising non-fuel pressures, but the broader slowdown in inflation is helping to stabilise the cost base,” it said, adding that fuel costs are expected to decline slightly to US$252 billion next year.
Load factors are forecast to continue to set record highs with airlines expected to fill 83.8 per cent of all seats over 2026, and passenger numbers are expected to reach 5.2 billion next year, up 4.4 per cent. "Cargo volumes are expected to reach 71.6 million tonnes in 2026, up 2.4 per cent (compared to) 2025,” it said.
Walsh said air cargo performance is of particular interest as it has defied many predictions of gloom to hold its own amid rapidly changing trading conditions. "As trade flows adapt to the protectionist US 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 artificial intelligence (AI) investments,” he added. - Bernama
