Global airlines slash 2026 profit forecast on fuel shock

Added: 2026-06-10

[00:00:00]The global airline industry nearly halved its 2026 profit forecast on Sunday, citing conflict in the Middle East that has driven up fuel costs, disrupted key air corridors, and exposed the fragility of a sector operating on thin margins. The International Air Transport Association represents more than 370 airlines, accounting for about 85% of global air traffic. It said in its annual report that it now expects the industry to post a combined net profit of $23 billion in 2026. That's down from $45 billion in 2025.

[00:00:37]The downgrade underscores airlines' exposure to geopolitical shocks and fuel volatility. Airlines are also expected to cut unprofitable routes to protect margins, while fares, which have surged since the start of the Iran war, are unlikely to fall soon, according to IATA.

[00:00:55]The Middle East conflict has forced airlines to reroute flights around closed or restricted airspace. It added hours to some journeys, increasing fuel burn and straining already tight capacity. At the same time, oil prices have surged on fears of supply disruption.

[00:01:13]Gulf airlines, such as Emirates, Qatar Airways, and Etihad Airways, face the greatest operational uncertainty after a near complete shutdown of regional airspace at the start of the conflict.

[00:01:25]IATA CEO Willie Walsh said most regions should remain profitable, though at lower levels, while Middle East airlines are likely to slip into the red due to the conflict and weaker demand.