The global airlines industry is expected to achieve a combined total net profit of US$41 billion (about N$700 billion) next year, up from US$39.5 billion (just over N$674 billion) this year. 

This is according to the latest figures from the International Air Transport Association (IATA) that noted while the expected Net Profit would set a new record, the net profit margin is expected to be unchanged from 2025 at 3.9%. 

IATA’s outlook further showed that that net profit per passenger transported is expected to be US$7.90, below the 2023 high of US$8.50, and unchanged from 2025. Meanwhile, operating profit in 2026 is expected to be US$72.8 billion (up from US$67.0 billion in 2025) for a net operating margin of 6.9% (improved on the 6.6% expected for 2025). 

IATA’s latest financial outlook added that a return on invested capital (ROIC) is expected to be 6.8% (unchanged from 2025). Despite deleveraging and improved operating profitability, ROIC is expected to remain below the weighted average cost of capital (WACC) estimated to be 8.2% in 2026. 

IATA’s latest financial outlook for the global airline industry shows a stabilisation of profitability even as supply chain issues persist. 

“Airlines are expected to generate a 3.9% net margin and a US$41 billion profit in 2026. That’s extremely welcome news considering the headwinds that the industry faces—rising costs from bottlenecks in the aerospace supply chain, geopolitical conflict, sluggish global trade, and growing regulatory burdens among them. Airlines have successfully built shock-absorbing resilience into their businesses that is delivering stable profitability,” said Willie Walsh, IATA’s director general.

While strong performance of airlines in the face of a changing and challenging operating environment is impressive, the fact that the airline industry collectively does not generate earnings that cover its cost of capital remains an issue to be resolved. 

“Industry-level margins are still a pittance considering the value that airlines create by connecting people and economies. They stand at the core of a value chain that underpins nearly 4% of the global economy and supports 87 million jobs. Yet Apple will earn more selling an iPhone cover than the US$7.90 airlines will make transporting the average passenger. And even within the air transport value chain, airline margins are totally out of balance, particularly when compared to margins of engine and avionics manufacturers and many of our service suppliers. Imagine the additional power that airlines could bring to economies if we could re-balance value chain profitability, reduce regulatory and tax burdens, and alleviate infrastructure inefficiencies,” said Walsh.

Meanwhile, air cargo’s performance is of particular interest as it has defied many predictions of gloom to hold its own amid rapidly changing trading conditions.