Airlines expect to carry more passengers this year but earn only half as much profit as in 2025, as high fuel prices don't appear to be fully deterring travel, according to new projections.
The International Air Transport Association (IATA) predicted its 370 member airlines, which account for 85 percent of global air traffic, will carry 5.1 billion passengers this year.
That is up 2.4 percent from 2025. The four billion mark was surpassed in 2023.
Asked by reporters about the impact of the war in the Middle East compared to the COVID-19 pandemic in 2020-2021, IATA Director General Willie Walsh replied: "I don't see this as a crisis."
"You're looking at an industry that is forecasting growth," he said. "If you extract the impact of the Middle East, we're looking at growth of 3.5 percent."
This growth, however, will be accompanied by profitability only half as strong as last year's, while Middle Eastern airlines are expected to post losses.
"War-related disruptions in the Middle East and rising fuel costs have shifted the outlook for airlines to the worse," Walsh said in a statement.
"Profits will shrink from $45 billion in 2025 to $23 billion this year. And margins will shrink from 4.2 percent to 2.0 percent," he said, referring to the net margin.
According to IATA's calculations, net profit is expected to be $4.50 per passenger, half the 2025 figure.
"Under the circumstances, that shows resilience. But it won't even buy you a hot dog at most of the FIFA World Cup venues and it does not leave much of a buffer should other costs or taxes start rising," Walsh said in the statement.
With fuel costs rising -- and those increases being passed on in part through higher ticket prices -- the revenue of IATA member airlines is expected to grow nine percent this year, reaching $1.165 trillion.
