Global Airline Profits Expected to Halve in 2026 as Jet Fuel Costs Surge $100 Billion, IATA Warns

IATA's outgoing director general Willie Walsh announced Sunday that global airlines face a profit collapse of roughly 50% in 2026, with net margins shrinking from 4.2% to 2.0% as collective fuel bills rise by an estimated $100 billion. The surge in jet fuel prices — up 62.4% year-over-year as of early June — is primarily attributed to the U.S.-Iran conflict that began in late February, compounding pressures already felt from the COVID-19 pandemic and the war in Ukraine. U.S. carriers alone spent $5.06 billion on fuel in March, a 56.4% increase from February and 30% more than the same month in 2025. Airlines most at risk include those whose balance sheets have not recovered from COVID-19 and carriers operating in the Gulf region. While travel demand remains relatively resilient and airlines are raising fares to offset costs, Ryanair CEO Michael O'Leary has warned that sustained high fuel prices could lead to European airline failures, a scenario he acknowledged could ultimately benefit his own carrier, which has hedged 80% of its summer fuel needs.