Global airlines slash 2026 profit forecast on fuel shock from the Iran-Israel war
The International Air Transport Association slashed its 2026 net-profit forecast for global airlines to about $10 billion from $18.5 billion previously, citing the jet-fuel shock triggered by the Iran-Israel war. Carriers also face higher insurance premiums and longer routings around closed airspace.
At its annual general meeting in Geneva, the International Air Transport Association significantly lowered its 2026 industry outlook. The trade body now expects global airline net profit to come in at about $10 billion this year, down from the $18.5 billion forecast issued in March, citing the jet-fuel price spike triggered by the Iran-Israel war and ongoing airspace closures.
Jet-fuel prices have climbed roughly 19% since Israel launched strikes against Iran on June 13. IATA Director General Willie Walsh said Middle East airspace closures had added two to three hours to flight times between Europe and Asia and could lift industry fuel costs by as much as $9 billion on an annualised basis.
P&I insurance premiums are also reported to be rising as carriers reckon with the same risk premium hitting maritime chokepoints such as the Strait of Hormuz and Bab-el-Mandeb. Shares in Lufthansa, Air France-KLM and IAG are down between 12% and 18% year-to-date. This article is not investment advice.
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