A new report says that airlines around the world are likely to see their profits cut in half this year as jet fuel costs increase by $100 billion U.S.
The International Air Transport Association (IATA) is warning that jet fuel costs have soared since the Iran war began on Feb. 28, hurting the global aviation industry.
Soaring jet fuel costs is the latest in a series of challenges that airlines have faced in recent years, including the Covid-19 pandemic and war in Ukraine.
IATA says that it expects average jet fuel prices to be 70% higher year-over-year in 2026, adding $100 billion U.S. to the collective fuel bills of carriers such as Air Canada (AC), American Airlines (AAL), and British Airways, among many others.
While travel demand remains resilient, airlines have begun raising fares to help offset the rising fuel costs. IATA says in its report that growth for airlines will inevitably be slower in 2026.
The industry group forecasts that the collective net profits of airlines will decline from $45 billion U.S. in 2025 to $23 billion U.S. this year, and net margins will fall from 4.2% to 2%.
A recent IATA poll found that 86% of airline travelers expect fares to be in line with oil prices, while 49% expect to spend more on travel this year than last.
The price of jet fuel increased 103% in March of this year compared to February, according to IATA. Jet fuel prices were up 62.4% year-over-year for the week ended June 5.
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