The global airline industry enters 2026 facing a complex mix of political, economic and environmental risks, even after posting a record net profit of $39.5 billion in 2025, according to a new analysis from the International Air Transport Association (IATA).
The outlook comes from Marie Owens Thomsen, Senior Vice President, Sustainability & Chief Economist at IATA, who outlines five key forces that could shape air travel, pricing and connectivity for passengers worldwide.
Despite the headline profit figure, margins remain thin, with the industry expecting a net margin of 3.9% in 2026 and an average profit of just $7.90 per passenger. Against this fragile backdrop, airlines face mounting pressures from policy fragmentation, aircraft shortages, climate disruption, cyber risks and shifting global economic conditions.
The 5 risks reshaping air travel in 2026
1. Policy fragmentation
Governments are increasingly adopting “me-first” trade and tax policies that weaken global coordination and threaten decades of aviation harmonisation under international institutions. Competing frameworks for managing CO₂ emissions and fragmented tax regimes risk raising the cost of flying while delivering limited environmental impact.
These policies also distort competition across airline networks and complicate long-term planning, potentially reducing route stability and consumer choice.
2. Supply chain disruptions
A persistent and record-high backlog of aircraft orders continues to limit airline growth. The mismatch between production capacity and airline demand is not expected to unwind before 2031–2034, capping fleet expansion and delaying aircraft replacement.
While high load factors support yields, slow fleet renewal has halted progress in improving fuel efficiency and is slowing the industry’s decarbonisation efforts.
3. Climate change-related disruptions
Extreme weather events and commodity price volatility increasingly disrupt infrastructure, agriculture, trade flows and investment patterns. Achieving net zero carbon emissions by 2050 depends on stable policies and reliable financing, both of which remain uncertain.
Associated pressures include food and water insecurity and increased migration, which may strain borders and affect international travel flows as governments adopt more restrictive immigration policies.
4. Cyber threats and artificial intelligence
Cyber threats continue to grow in frequency and severity, intensified by artificial intelligence, geopolitical instability and deeper digital dependence across airline systems and supply chains. The airline industry’s reliance on critical infrastructure makes the global network particularly exposed to disruption.
AI also introduces risks linked to misinformation, privacy loss, erosion of trust and potential economic disruption, while tangible productivity gains remain uncertain.
5. Macro-economic outlook
The US dollar is expected to continue a long-term depreciation trend in 2026 as interest rates fall and global investors turn to alternative safe havens. A weaker dollar benefits non-US airlines because more than 50% of airline costs are denominated in US dollars.
Oil markets are also undergoing structural change as electrification and liquefied natural gas reduce demand growth, increasing supply and placing downward pressure on fuel prices. However, global GDP growth is unlikely to accelerate, limiting demand expansion and increasing vulnerability to policy mistakes or unforeseen shocks.
“Even without quantifying all those dynamic effects, the airline industry supports 87 million jobs and 4% of global GDP. Air transport is not just about flying—it’s about driving progress. Let it lead the way,” said Marie Owens Thomsen.
For travellers, the outlook remains mixed. Airlines benefit from improving fuel economics and resilient demand, but structural risks could influence fares, route availability and service reliability as the industry navigates an increasingly uncertain operating environment.
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