Iata forecasts airline profits to rise more in Europe than US

Europe’s airlines are forecast to surpass those in North America in profitability next year, according to Iata’s latest industry projections.

Global airline profits are forecast to hit $41 billion in 2026, up from $39.5 million this year – itself a 10% increase on Iata’s forecast in June.

Iata forecasts airlines’ net profit in Europe should total $14 billion, almost $1 billion up on 2025 and ahead of the $11.3 billion total predicted for North America.

However, carriers based in the Middle East should see the highest profit margin per passenger, as this year, at close to $29 compared to $10.90 per passenger in Europe and $9.80 in North America.

Passenger numbers are expected to reach 5.2 billion in 2026, up 4.4% on this year, and total industry revenue to reach $1.053 trillion, up 4.5% year on year having surpassed $1 trillion this year.

Iata director general Willie Walsh hailed a “strong performance in the face of a changing and challenging operating environment”.

But he pointed out the average airline profit margin would remain just 3.9% and average margin per passenger globally just $7.90 – the same as Apple earns from the sale of an iPhone cover.

At the same time, Walsh said supply chain challenges would continue to constrain airlines’ ability to meet demand, warning the backlog in aircraft deliveries will continue to grow as the pace of new orders outstrips production.

Iata forecast the industry would see only a 1% overall improvement in fuel efficiency next year as delivery delays hinder the replacement of older aircraft, with the average age of the worldwide fleet set to hit the highest recorded at more than 15 years.