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.
Register for Tekedia Mini-MBA edition 19 (Feb 9 – May 2, 2026).
Register for Tekedia AI in Business Masterclass.
Join Tekedia Capital Syndicate and co-invest in great global startups.
Register for Tekedia AI Lab.
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.