Global aviation is set to extend its post-pandemic recovery into 2026, with passenger numbers and cargo volumes still climbing, even as profitability remains fragile and uneven across regions.

New projections from the International Air Transport Association (IATA) show an industry that is growing, but only just holding its financial footing, with Africa standing out as a region where demand is rising faster than the global average, while earnings lag far behind.

IATA projects that global passenger traffic will increase by 4.9% in 2026, while cargo volumes are expected to grow by 2.4%. The outlook was outlined by IATA Director General Willie Walsh during his address at the Changi Aviation Summit 2026 in Singapore, where he described the coming year as one of continued progress, but warned that airlines are still operating with little margin for error.

Walsh framed 2025 as a relatively strong year for aviation. Global passenger traffic grew by 5.3%, underpinned by a solid rebound in international travel, which expanded 7.1%. Domestic markets grew more slowly, at 2.5%, reflecting maturity in key markets and cost pressures that constrained capacity. Cargo volumes rose 3.4%, but the recovery was uneven across trade lanes. Shipments between Asia and North America fell by 0.8%, weighed down by trade frictions and softer consumer demand, while cargo volumes between Europe and Asia surged 10.3%, benefiting from rerouted supply chains and stronger industrial activity.

Against this backdrop, IATA’s 2026 forecast points to moderation rather than momentum loss. Passenger growth of 4.9% and cargo growth of 2.4% are slightly below 2025 levels, but still represent a healthy expansion in an industry facing geopolitical tensions, volatile fuel prices, supply chain constraints, and currency swings.

Walsh said the numbers remain encouraging, noting that while growth is easing, it continues to provide a meaningful advantage for airlines navigating a complex operating environment.

Yet the headline growth masks a deeper concern: profitability remains stubbornly thin. IATA estimates that the global airline industry will earn about $41 billion in net profit in 2026. While the figure sounds substantial, it translates into a net margin of just 3.9% and an operating margin of 6.9%. On average, airlines are expected to make only about $7.9 in profit per passenger, leaving the sector highly exposed to shocks such as fuel price spikes, geopolitical disruptions, or sudden demand slowdowns.

Africa encapsulates this imbalance more clearly than any other region. Passenger traffic on the continent is forecast to grow by 6% in 2026, outpacing the global average. Capacity is expected to expand by 5.7%, signaling cautious confidence among airlines. However, despite faster traffic growth, African carriers are projected to generate a combined net profit of just $0.2 billion. The region’s net margin is expected to remain negative at -1%, with revenue per passenger estimated at only $1.30.

The core issue is cost. IATA data show that African airlines face the highest unit costs in the world, at 140 US cents per available tonne-kilometre, nearly double the global average. Aging aircraft fleets drive up maintenance expenses, while fragmented markets prevent airlines from achieving scale efficiencies. Regulatory barriers, limited liberalization of airspace, and restrictive bilateral agreements further constrain route optimization and network growth.

Beyond airline-specific challenges, broader structural factors continue to weigh on African aviation. Low GDP per capita limits discretionary travel, visa restrictions suppress intra-African mobility, and high passenger charges inflate ticket prices. Corporate tax rates averaging around 28% add another layer of pressure in an industry already operating on slim margins.

Nigeria provides a revealing case study of how these constraints play out in practice. According to the President of the Aircraft Owners and Pilots Association of Nigeria, Dr. Alexander Nwuba, domestic airlines earn only about N8 per kilometer flown. He explained that it costs roughly N104 per kilometer to operate a domestic flight, while average revenue stands at around N112 per kilometer. This narrow spread leaves airlines extremely vulnerable, even with air fares at elevated levels.

Dr. Nwuba also pointed to the small size of Nigeria’s air travel market. Only about 0.02% of Nigerians fly annually, a stark contrast to Europe or the United States, where air travel penetration is far higher. This limited demand makes it difficult for airlines to achieve economies of scale, spread fixed costs, or invest aggressively in fleet renewal. High aviation fuel prices, limited aircraft availability, a weakened naira, and multiple aviation charges further squeeze margins.

However, while IATA projects that demand will continue to grow, and passenger numbers are expected to rise across most regions, financial resilience remains elusive. For Africa, stronger traffic growth alone is not enough to deliver sustainable profitability. Without structural reforms to address costs, taxation, infrastructure gaps, and regulatory fragmentation, airlines on the continent will continue to carry more passengers while struggling to convert that growth into durable financial gains.

This means that growth is no longer the primary problem of the industry, particularly in regions like Africa, where the appetite for air travel is rising faster than the economic foundations needed to support it. The challenge now lies in ensuring that growth translates into viable and resilient airlines.

When Mark Zuckerberg announced the metaverse in 2021, there was a huge amount of hype around the concept. The founder and CEO of Meta himself had grand plans for it and initially stated that he believed one billion people would be using it by 2030.

In the years since the announcement, however, talk of this virtual reality world has died down, and it seems now that Meta is pivoting away from its original idea. The metaverse may still happen, but it could be further in the future than originally anticipated.

Meta Seems to Have Pivoted Away from the Metaverse

Meta has invested heavily in Reality Labs in the last few years, as it believes that immersive virtual worlds are the future of social interaction. VR has long been predicted as a disruptive technology and one that could be set to take the world by storm at some point, but artificial intelligence has stolen the limelight since its adoption rapidly accelerated in 2023.

Meta has shifted towards AI and practical creator technologies, and a lot of this has been to do with commercial pressure. With many of its main rivals also putting increased resources into AI development, Meta has had to do the same. Metaverse development requires long timelines and expensive hardware adoption, which is something that’s often difficult to justify to shareholders who want near-term returns.

When the metaverse was first conceived, there may have been plans to go all-in on the project. But because of developments in other technology, it may now be a case of building it gradually. Immersive elements will most likely seep into everyday use, rather than appear all at once. The metaverse could still be on the horizon, but it may be much longer until it becomes fully realised.

Current Entertainment Industry May Be Too Strong to Disrupt

Another problem for an idea as drastically innovative as the metaverse is that the current entertainment industry is incredibly strong as it is. People often don’t want change if the things that they can currently get are sufficient.

Major providers like Netflix are doing everything they can to keep people interested in the existing model, by constantly adding new ways to enjoy their platforms. The original streaming service has added games to its offerings, along with various live events that have generated a lot of hype. For instance, Skyscraper Live was the latest event, with millions of people watching Alex Honnold climb Taipei 101 in real time.

The same can be seen in the online casino industry, where new inventions are regularly added to keep interest high. The casino online UK market is now packed full of slots with new features, and even includes multiplayer games now such as 4 Cash Planes. Players are familiar with the format, and can easily find the games they want to play.

If the metaverse were to come along and shake everything up, there would be a new learning curve for people. They would need to master new ways to find the content they want to watch or play, which could lead to frustration.

The metaverse could still be on the way, but its introduction may be different to what was originally planned. It makes more sense for elements of the metaverse to be introduced steadily over time, rather than in one fell swoop. That’s the approach that Meta seems to be taking now.

India has moved to recalibrate its trade and industrial policy at a moment of rising global fragmentation, cutting tariffs on a wide range of capital goods and raw materials in a bid to reduce dependence on China, support its energy transition, and blunt the impact of U.S. trade actions on exporters.

The measures, announced in the annual budget on Sunday, underline how New Delhi is increasingly using customs policy as a strategic lever rather than a narrow revenue tool, as geopolitical tensions and protectionism reshape global supply chains.

Finance Minister Nirmala Sitharaman said the government would lower duties on capital goods required to process critical minerals and manufacture lithium-ion battery cells, a step aimed at strengthening domestic manufacturing capabilities essential for clean energy and electric vehicles. Tariffs were also eliminated on sodium antimonate, used in solar glass production, and on monazite, a key source of rare earth elements used in permanent magnets for EVs and other clean-energy technologies.

The rare earth decision carries particular weight. China controls more than 90% of global processing capacity for rare earth magnets and imposed export curbs last year, disrupting electric vehicle production plans in India and elsewhere. By cutting duties on monazite and related inputs, New Delhi is signaling a long-term push to build local processing capacity and reduce vulnerability to Chinese supply dominance, even though analysts caution that developing a full rare earth ecosystem will take years and significant investment.

Beyond energy transition materials, the budget included tariff concessions for raw materials used by export-oriented sectors such as marine products, leather, and textiles. These industries have faced growing pressure from U.S. tariffs imposed under President Donald Trump, who has adopted an aggressive trade stance toward partners, including India. Sitharaman framed the cuts as a way to lower input costs and preserve competitiveness for exporters navigating a more hostile global trade environment.

India also moved to support strategic and high-value manufacturing. Duties were cut on inputs used to produce aircraft parts for maintenance and repair in the defense sector, and on components for the electronics industry. Both areas are central to India’s effort to attract global manufacturers seeking to diversify away from China amid geopolitical risk and supply chain disruptions.

Analysts say the tariff reductions are closely tied to India’s ambition to reach $1 trillion in goods exports. Lower input costs could help Indian firms integrate more deeply into global value chains, improve margins, and attract foreign investment. Customs duty reforms, they argue, are a necessary—though not sufficient—condition for India to emerge as a credible alternative manufacturing hub.

At the same time, the changes reflect continuity rather than a radical departure in trade policy. Experts describe the approach as incremental and tactical, aligning India’s tariff structure with new trade deals and shifting geopolitical realities while avoiding sweeping liberalization. This caution reflects the broader uncertainty created by rising protectionism, conflicts between major powers, and the disruption of long-standing multilateral trade norms.

The budget also made a one-time concession for special economic zones, traditionally export-only enclaves, allowing them to sell into the domestic market. The move is intended to address underutilized capacity in SEZs, which have struggled amid global trade disruptions and weaker external demand. While welcomed by the industry, analysts view it as a stopgap rather than a structural fix.

However, the tariff cuts highlight how India is repositioning itself in a rapidly changing global economy. While these calibrated steps are enough to deliver a sustained manufacturing take-off, they underscore New Delhi’s growing reliance on trade policy as a strategic instrument.