India and China are set to drive passenger traffic growth in the Asia-Pacific region over the next two years as the global airline industry enters a stronger financial phase, the International Air Transport Association (IATA) said in its latest outlook released in Geneva.
IATA expects airlines in the Asia-Pacific region to post $6.6 billion in net profit in 2026, supported largely by India’s expanding aviation market and China’s recovery-led demand.
Globally, the sector is projected to record $41 billion in net profit in 2026, higher than the expected $39.5 billion this year. The industry is also expected to operate at a record passenger load factor of 83.8%, reflecting strong demand amid limited aircraft availability, while net margins are forecast to stabilise at 3.9%.’
What did Willie Walsh say?
“Airlines are expected to generate a 3.9% net margin and a $41 billion profit in 2026. That’s extremely welcome news considering the headwinds the industry faces,” said Willie Walsh, Director General, IATA. “Airlines have successfully built shock-absorbing resilience into their businesses.”
Total industry revenue is projected to rise to $1.053 trillion in 2026, while operating expenses are estimated at $981 billion. Net profit per passenger is expected to remain steady at $7.90, unchanged from 2025 and slightly below the $8.50 recorded in 2023. IATA represents around 360 airlines, accounting for more than 80% of global traffic.
Outlook notes persistent structural challenges
However, the outlook notes persistent structural challenges. Supply chain delays continue to slow aircraft replacement cycles, pushing the average fleet age beyond 15 years, the highest on record. Fuel efficiency gains are expected to remain modest, even as fuel consumption climbs to 106 billion gallons in 2026. Fuel costs are forecast to ease marginally to $252 billion next year.
Cargo volumes are expected to rise to 71.6 million tonnes, supported by e-commerce growth and semiconductor shipments linked to AI-related manufacturing.
IATA cautioned that geopolitical tensions, airspace restrictions and rising regulatory burdens continue to constrain operations and efficiency across several regions.
