The impact of the ongoing war in the Middle East is now visible on the global aviation industry as well. The International Air Transport Association (IATA), the organization representing the world’s major airlines, has made a major cut in the airline industry’s profit forecast for the year 2026. The organization says that after the Iran war, increased fuel costs, disruption in air routes and operational challenges have increased pressure on airlines’ earnings.
According to IATA’s annual report, the combined net profit of the global airline industry is now estimated to be around $23 billion in 2026. Earlier this estimate was around 41 billion dollars. The industry’s profit in 2025 was estimated to be $45 billion. This means that there may be a significant decline in profit in one year.
Jet fuel prices increase the burden
IATA Director General Willie Walsh said that there are two main reasons behind this cut. Firstly, the higher than expected increase in jet fuel prices and secondly, the operational problems faced by the airlines of the Gulf region. Due to war, many countries have closed or limited their airspace, due to which airlines have to take longer routes. Due to this both fuel consumption and cost have increased. According to the organization, the total fuel expenditure of airlines may increase from about $ 252 billion by 2025 to $ 350 billion this year. Fuel can now constitute almost one-third of the total operating costs of airlines.
Rents likely to remain high
Many international routes have been affected since the war started. Airlines are having to change the routes of flights, due to which travel time has increased. In such a situation, an increase in ticket fares has also been seen. IATA believes that there is little possibility of any major relief in airfares in the near future as demand remains strong while capacity is under increasing pressure. According to Willie Walsh, due to rising costs some small airlines may close down or be acquired by larger companies. Also, many airlines may reduce flights on loss-making routes.
Revenue will increase, but profit will remain under pressure
However, demand for travel still remains strong. IATA estimates that the total revenue of the global airline industry could increase by 9.4 percent this year to reach approximately $1.16 trillion. Apart from ticket fare, income from seat upgrades, additional luggage and other services will also contribute to this.
Despite this, the challenges for the airlines are not less. Delays in delivery of planes from Boeing and Airbus are forcing companies to use older and less fuel-efficient planes for longer periods. This is increasing maintenance costs and putting additional pressure on profits. IATA says that if the Middle East crisis drags on, the situation for the global aviation industry may become more challenging.
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