Airlines to Profit $41B in 2026 as Europe Takes Crown from US

The International Air Transport Association (IATA) has projected that airlines worldwide will earn a record net profit of about $41 billion in 2026.

A key shift in the outlook is that European carriers are expected to generate more profit than North American airlines for the first time in several years, signaling a change in regional performance patterns.

Headline forecasts

• Total net profit: $41 billion in 2026 (up from $39.5 billion in 2025), with the net profit margin stable at 3.9 percent.
• Net profit per passenger: $7.90, unchanged from 2025 and still below the 2023 peak of $8.50.
• Operating profit: $72.8 billion in 2026 (up from $67.0 billion in 2025), raising the operating margin to 6.9 percent.
• Total industry revenue: $1.053 trillion, a 4.5 percent increase over 2025.
• Passenger volumes: 5.2 billion travelers in 2026 (up 4.4 percent).

Revenue outlook

• Passenger ticket revenue is expected to climb to $751 billion in 2026, helped by a 4.9 percent increase in revenue passenger kilometers (RPK). Passenger yields should remain mostly stable, while aircraft shortages will continue to push load factors to record levels.
• Ancillary and other revenues are projected to reach $145 billion, up 5.5 percent. These products now account for almost 14 percent of industry revenue, compared with 12 to 13 percent before the pandemic.

Fuel costs and sustainability pressures

• Fuel expenses are projected to fall slightly to $252 billion.
• Fuel is expected to account for 25.7 percent of total airline operating costs. As airlines cycle out of expensive 2025 hedges, more carriers are likely to benefit from lower spot prices.
• Fleet renewal will remain slow because of supply chain constraints, keeping efficiency improvements at around 1 percent and raising the average aircraft age to more than 15 years.
• Costs tied to decarbonization are also growing. CORSIA compliance is expected to cost $1.7 billion in 2026.
• Airlines are also expected to spend an additional $4.5 billion on Sustainable Aviation Fuel, with supply reaching 2.4 million tonnes.

What this could mean in practice

Airlines are likely to keep investing in new aircraft, growth in flight networks, and digital innovations, but their main focus will be on managing costs and improving efficiency.

Passengers and corporate buyers can expect relatively full planes and stable prices, with Europe’s competition heating up mainly between low-cost airlines rather than traditional North American giants.

For investors, the sector looks more established and profitable, with projected returns on invested capital of about 6.8 percent in 2026, which is better than earlier years, but still just a bit below the cost of capital.

Toward net zero

IATA recently reiterated its call for global coordination to help aviation meet its goal of net-zero emissions by 2050.

Alongside the World Travel and Tourism Council, it emphasized that governments, regulators, and private-sector partners must align policies and accelerate investment in cleaner technology and infrastructure.

The joint statement highlights how important it is to establish a consistent worldwide regulatory framework, guided by ICAO, which not only defines the technical rules but also manages CORSIA, a program forecasted to bring in more than $120 billion from 2024 through 2035.

Photo by Vee Guereca on Unsplash