‘Lower fuel costs will repair balance sheets’

Profits forecast at €37.8bn for 2026.
Growth driven by India, UAE, and Saudi Arabia.
Europe leads in airline profitability.
Aircraft supply shortages from manufacturer backlogs.
Emphasis on reducing carbon intensity via new technology.
Sustained low fuel prices in 2026 to aid airline balance sheet repairs.
Higher labour and maintenance costs pose ongoing challenges.
Airlines projected to achieve net profits of €38bn in 2026.
Fourth consecutive profitable year for the global aviation sector.
Growth spearheaded by India, the UAE and Saudi Arabia.

Avolon has predictd that global airline profits are projected to reach €37.8bn in 2026, driven by robust demand and favourable fuel prices aiding recovery from pandemic impacts. Growth leaders include India, the United Arab Emirates, and Saudi Arabia, benefiting from expanding middle-class populations and strong connectivity models. These nations hold orders for 3,000 aircraft, with 900 deliveries anticipated over the next three years.

In Europe, airlines led profitability in 2025 and are expected to maintain that position in 2026, amid market consolidation such as Air France-KLM’s stake in SAS and Lufthansa’s hold on ITA. Supply constraints from Boeing and Airbus backlogs, resulting in 4,000 undelivered aircraft this decade, limit capacity expansion but support leasing firms.

Geopolitical uncertainties and potential recessions pose risks, yet the industry’s resilience through past crises like 9/11 and Covid underscores its durability. Environmental focus remains on adopting new technology aircraft to reduce carbon intensity, despite shifts in policy priorities

The company revealed in a newly published outlook for 2026 that airlines are on track to generate net profits of $41bn (€38bn) this year, marking the fourth consecutively profitable year. It expects global aviation growth to be spearheaded by India, the UAE and Saudi Arabia.

The outlook from Avolon points to the continuation of profitability trends from previous years, with low oil prices acting as a key driver. Airlines have faced challenges from increased costs in other areas, but the fuel savings provide a buffer. The projection of €38bn in net profits underscores the resilience of the sector.

Growth in aviation is anticipated to centre on regions such as India, the UAE and Saudi Arabia, where demand is rising rapidly. Avolon confirmed that these areas will lead the expansion. The overall forecast suggests a positive trajectory for the industry through 2026.

Avolon shared in a written statement “Sustained low fuel prices during 2026 are expected to help the world’s airlines continue to repair balance sheets despite higher labour and maintenance costs. Airlines are on track to generate net profits of $41bn (€35bn) this year, marking the fourth consecutively profitable year.”

Jim Morrison shared “What we’ve seen is that there’s a handful of emerging countries that are benefiting from growing middle class populations, improving demographics, as well as the strength of a global connecting business models.”

“Airlines in Europe actually led the world in profitability in 2025 and are expected to do so again in 2026.”

“We are seeing uncertainty in the world around us – we’re seeing political risk, we’re seeing geopolitical risk as well, too. But this is an industry that survived through the 9/11 challenges, survived through Covid, survived through interest rate increases as well.”