Willie Walsh: European airline profits to fall over quarter by 2026

The European aviation sector's net profit is forecast to decline to $9.6 billion in 2026, down from $13 billion the previous year, International Air Transport Association (IATA) Director General Willie Walsh said at a press conference during the 82nd IATA Annual General Meeting (AGM) and the World Air Transport Summit (WATS).

According to a Report correspondent from Rio de Janeiro, Walsh said the European aviation industry's net profit margin will decline to 3.1% this year, down from 4.5% in 2025.

"Europe, which relies heavily on jet fuel imports from the Gulf states, is facing significant cost increases. This impact is currently being mitigated by the fact that approximately 70% of fuel needs have been hedged at pre-crisis prices. However, as these contracts expire, cost pressures will intensify," noted William Walsh.

The head of IATA emphasized that the market is being supported by the development of direct air links between Europe and Asia, which allows for the partial replacement of routes via Middle Eastern hubs.

At the same time, he pointed to the ongoing structural problems in European aviation.

"Some parts of Europe continue to feel the impact of airspace restrictions over Russia. Furthermore, the expected deterioration of the macroeconomic situation, slowing economic growth, and rising energy prices will negatively impact household purchasing power.

European airlines also face additional pricing pressure due to burdensome regulations, including mandatory requirements for the use of sustainable aviation fuel (SAF), as well as increased airport and air navigation charges. Ongoing strikes in a number of markets are causing operational disruptions and limiting carrier flexibility. All these factors indicate that the competitiveness of European aviation may continue to decline even after market conditions normalize," said Walsh.