Amman, June 7 (Petra) -- The global aviation sector has slashed its profit forecasts for 2026 by nearly half due to the economic fallout from the war in the Middle East.

The International Air Transport Association (IATA), which represents more than 370 airlines comprising around 85 percent of global air traffic, announced in its annual report on Sunday that net profits for the sector are expected to hit $23 billion in 2026. The figure is down sharply from earlier projections of $41 billion and marks a clear drop from the $45 billion recorded by the industry in 2025.

The war in the Middle East has driven up fuel costs and disrupted key flight paths, exposing the vulnerability of a sector operating on tight margins, according to Reuters. The report projected the global airline fuel bill to surge to $350 billion this year, up from $252 billion in 2025.

Conversely, total industry revenues are expected to climb 9.4 percent to $1.16 trillion this year, bolstered by resilient travel demand, higher ticket fares, and rising ancillary revenues from services like seat upgrades and in-flight amenities.

"There are two key factors: first is the sharp increase in jet fuel prices that has gone beyond what I think anyone expected, and second is the disruption faced by airlines in the Middle East region," IATA Director General Willie Walsh said in statements. "This combination has forced us to lower expectations."

Walsh added that some smaller airlines could face bankruptcy or acquisition by larger carriers this year and next as the full impact of high fuel costs takes hold. Airlines are also expected to eliminate unprofitable routes to shield their financial margins, he noted.

//Petra// AF

07/06/2026 22:08:12