- The International Air Transport Association expects global airline profitability to halve in 2026.
- The agency said that surging fuel costs are adding a collective $100 billion to airlines' fuel bills.
- European carriers hit by additional jet fuel costs have moved to hedge their summer fuel needs.
The International Air Transport Association warned that global airlines can expect to see profits plunge by half in 2026 as the rising cost of jet fuel continues to squeeze the industry.
Oil prices jumped and jet fuel costs soared after the U.S.-Iran conflict began on Feb. 28, noted IATA's outgoing director general
Willie Walsh, adding to the challenges he said airlines have faced in recent years from the Covid-19 pandemic to the war in Ukraine.
"As a result, we expect average jet fuel prices to be 70% higher year-on-year," Walsh said in a report on the State of the Global Air Transport Industry published Sunday. "That will add $100 billion to our collective fuel bill this year."
Walsh noted that while travel demand remains resilient,
airlines are raising fares to cope, but he said growth will inevitably be slower.
"Considering all this, we expect profitability to halve from 2025," Walsh added. "Net profits will fall from $45 billion to $23 billion in 2026, and net margins from 4.2% to 2.0%."
Airlines whose balance sheets haven't recovered from Covid-19 and those operating in the Gulf will be most affected, according to Walsh.
An IATA poll showed that 86% of travelers expected fares to be in line with oil prices, while 49% expected to spend more on travel this year than last.
"The big unknown is how long travelers and shippers can tolerate the higher costs of connectivity," Walsh said.
The Middle East conflict sent
oil prices surging to over $100 a barrel in March and the price of jet fuel increased 103% in March compared to the previous month, according to data from IATA. Jet fuel prices were up 62.4% year-over-year for the week ending June 5, per IATA.
Meanwhile.
U.S. carriers spent 56.4% more on jet fuel in March than in February, according to data from the Department of Transportation in May. They spent a total of $5.06 billion on fuel in March, up from $3.23 billion in February, and 30% more than what they paid in March 2025.
European budget carrier
EasyJet reported a headline pre-tax loss of £552 million (about $735 million) for the first half of its financial year ending March 31, and took on an additional £25 million in fuel costs in March.
The airline said customers are leaving it later to book tickets, making it harder to predict future sales, and added that it has hedged
72% of its summer fuel.
Ryanair's CEO Michael O'Leary told CNBC in April that he expects other
European carriers to struggle if jet fuel costs remain high.
"If pricing stays higher for longer this summer, we think a number of our airline competitors in Europe are going to face real financial difficulties," O'Leary said.
"I think there will be failures," O'Leary added. "If it continues at $150 a barrel into July, August, September, then you'll see European airlines fail and that, in the medium term, would probably be good for Ryanair's business." - CNBC's Leslie Josephs contributed to this report.
<small>Source: CNBC</small>
Business
Airline profits set to halve this year as fuel costs jump by $100 billion: IATA
CNBC
June 08, 2026
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