IATA Lowered Airline Profit Forecast: Why Airfares May Increase in 2026

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Marta Skylar
Aviation News Editor
28.07.2026 07:24

IATA Lowered Airline Profit Forecast: Why Airfares May Increase in 2026

The International Air Transport Association (IATA) released an updated forecast for the aviation industry for 2026 on June 7: due to a sharp increase in aviation fuel prices and disruptions related to the Middle East, expected airline profits may drop nearly twofold. For passengers, this does not mean a stop to travel, but it increases the risk of more expensive tickets, less flexible fares, and more frequent schedule changes on certain routes.

The new IATA forecast has become one of the most important signals for the summer tourist season. The industry remains profitable on a global scale, the demand for flights has not disappeared, and passenger traffic in 2026, according to the association's estimate, is expected to reach 5.1 billion travelers. However, the financial cushion of airlines has become much thinner: IATA expects the total net profit of global air carriers to be 23 billion dollars instead of the previously forecasted 41 billion dollars. This is also approximately half of the 2025 estimate.

The main reason for the revision is fuel. According to IATA, airline fuel costs could rise from 252 billion dollars in 2025 to 350 billion dollars in 2026. The average price of aviation fuel, according to the association's calculations, could be nearly 70% higher than last year. For airlines, this is critical because fuel again accounts for a significant share of operating costs, and it is impossible to quickly compensate for such a jump solely through efficiency, denser aircraft loading, or route optimization.

What Exactly Changed in the IATA Forecast

IATA published the updated financial forecast during the 82nd Annual General Meeting and World Air Transport Summit in Rio de Janeiro, which took place on June 6-8, 2026. This is important not only as an industry event: it is at such meetings that airlines, airports, governments, and suppliers see a common picture of risks for route networks, fares, and passenger demand.

Key figures in the updated forecast look as follows:

  • airline net profit in 2026 is expected to be 23 billion dollars;
  • net margin may decrease to 2.0% compared to 4.2% in 2025;
  • profit per passenger carried is estimated at only 4.50 dollars;
  • passenger revenues may grow to 839 billion dollars;
  • the load factor is predicted to reach a record 84%;
  • fuel costs may reach 350 billion dollars.

These indicators show a mixed picture. On one hand, planes will be full, and people continue to travel. On the other hand, airlines will earn much less from each passenger than previously expected. This means that even a small additional burden - taxes, airport fees, aircraft delivery delays, strikes, or new detour routes - can more quickly be reflected in prices, baggage rules, and the commercial policies of carriers.

Why Fuel Has Such a Strong Impact on Tickets

Aviation fuel is one of the largest expense items for carriers. When its price rises sharply, companies have only a few options: raise fares, cut less profitable flights, more actively sell additional services, change aircraft types on routes, or accept a lower margin. In reality, a combination of these decisions usually occurs.

IATA explicitly states that passenger revenues will grow faster than demand in terms of passenger-kilometers. This means that part of the price increase is already being transferred into fares. At the same time, the industry cannot automatically transfer the entire fuel shock to passengers: too sharp a price increase could reduce demand, especially for family vacations, short city-break trips, and journeys with multiple transfers.

Long-haul routes, flights with long detour trajectories, and directions where competition is limited may be the most vulnerable. For short European or domestic flights, pressure also exists, but there passengers more often compare aviation with trains, buses, or cars, so it is harder for airlines to raise prices without losing part of the demand.

The Middle East Remains the Main Source of Uncertainty

In the forecast, IATA separately highlights the Middle East. According to the association's estimate, this region is moving from profit to an expected total loss in 2026. The reason is not only the cost of fuel, but also a more complex operational picture: closure or restriction of airspace, longer routes, changes in transfer traffic flows, cancellation of some flights, and higher costs of maintaining the schedule.

For tourists, this does not mean that transfers through regional hubs automatically become dangerous or impractical. Large Gulf carriers have strong networks, modern infrastructure, and experience working in conditions of instability. But passengers should be more attentive to connections, especially if the route passes through large transfer hubs, including Doha (DOH), Dubai (DXB), or Istanbul (IST). Before departure, it is useful to check not only the email from the airline, but also the online board: flight status pages for Hamad Airport in Doha, Dubai Airport, and Istanbul Airport are available on the site.

Europe and North America Will Feel the Pressure Differently

For Europe, IATA predicts profit, but lower than last year. European airlines depend on fuel imports, partially protected by previous hedging, but over time this protection will weaken. Added to this are costs for environmental requirements, airport and navigation fees, strike activity in a number of countries, and airspace restrictions on eastern routes.

For passengers, this may manifest not in one large price jump, but in smaller changes: fewer cheap seats on popular dates, more expensive baggage, stricter conditions for the cheapest fares, higher ticket prices on peak weekends and holidays. Connections through large hubs, where high load is combined with operational risks, should be planned especially carefully. For travelers through London Heathrow or Frankfurt, checking the flight status before heading to the airport should become a practical habit, specifically via the LHR online board and the FRA online board.

In North America, the picture is different. IATA notes that many carriers in the region use fuel hedging less, so the increase in fuel prices is transferred more quickly into their cost base. Network airlines with premium cabins, loyalty programs, and strong international routes may have more tools to compensate for costs. In contrast, low-cost carriers and carriers more dependent on domestic demand may act more cautiously: cutting weaker routes, reviewing frequencies, or more actively monetizing additional services.

What This Means for Travelers

The most important conclusion for the passenger is simple: in 2026, cheap tickets will not disappear, but there may be fewer of them for convenient dates, popular destinations, and routes with high fuel costs. If previously one could hope for frequent sales closer to the date of departure, now such a strategy is becoming riskier. IATA also notes that many passengers have started to research travel conditions more before booking and more frequently monitor geopolitical risks.

Practically, this means several things. First, it is worth comparing not only the base ticket price, but also the total cost including baggage, seat selection, transfers, and the possibility of changing the date. Second, on routes with transfers, a larger time buffer should be left, especially if the connection is through a large hub or a country with an increased risk of delays. Third, for long trips, it is better to check alternative routes: sometimes a direct flight is more expensive but more reliable, and sometimes one well-planned transfer saves money without excessive risk.

It is also worth considering separately that airlines may more actively change schedules. This will not necessarily be a mass cancellation of flights. More often, it is about seasonal adjustments, changes in frequencies, shifting departure times, or replacing the aircraft. Therefore, after buying a ticket, the route should not be considered final and unchanging: checking the booking a few weeks, a few days, and the day before departure becomes a normal part of trip preparation.

Is It Worth Buying Tickets Earlier

There is no single rule, but under fuel pressure, early booking for peak dates looks smarter. If it is about summer vacations, Christmas holidays, major sporting events, or routes with limited competition, delaying can mean not only a higher price, but also a worse choice of departure time. At the same time, for flexible travelers, there may still be advantageous options for non-peak days: Tuesday, Wednesday, Saturday, or early morning departures often leave more chances to find a lower fare.

For long routes, it is worth looking at the overall stability of the airline and hub, rather than just the minimum price. If the difference between two options is small, preference may be given to a route with a longer connection, clear rebooking rules, and a better punctuality history. For travel through the USA, it is useful to check the status of large hubs in advance, for example New York JFK and its online flight board, especially if a separate transfer or domestic flight is planned further.

Conclusion

The updated IATA forecast does not signal an aviation travel crisis in the style of the pandemic collapse. On the contrary, the world continues to fly, planes remain well-filled, and most regions, according to the association's estimate, will maintain profitability. But the economics of flights have become tougher: fuel is more expensive, margins are lower, and airlines have less room for error.

For tourists, this means a more pragmatic approach to booking. It is worth budgeting with a reserve, checking the full cost of the fare, avoiding too short connections, and monitoring the schedule after buying the ticket. The cheapest flight may still be a good deal, but in 2026, the balance between price, route reliability, and flexibility of conditions becomes more important. This balance will help travelers get through the travel season without unnecessary expenses and unpleasant surprises.

Sources: updated IATA financial forecast from June 7, 2026, materials from IATA AGM & World Air Transport Summit 2026, industry coverage of the consequences of aviation fuel price increases for fares and route networks.