Introduction
The global air transport industry enters 2026 facing an increasingly evident paradox: it has never transported so many passengers or generated such high revenues, yet its profitability remains structurally fragile. The International Air Transport Association (IATA) projections presented during their Media Day in Geneva confirm this tension: a forecast of historic net profits amounting to $41 billion for 2026 and, simultaneously, a net margin stagnating at a mere 3.9%, insufficient to cover capital costs.
The Slim Returns and Value Chain Disparity
This slim return is striking not only for its scarcity but also due to the contrast it presents within the aviation value chain. Airlines operate with minimal margins and a return on capital below the Weighted Average Cost of Capital (WACC), while key suppliers—such as engine and systems manufacturers—report margins close to 27%. This imbalance restricts the air transport sector’s ability to invest, renew itself, and sustain its role as a global economic engine despite connecting economies representing nearly 4% of the world’s GDP and 87 million jobs.
External Factors Contributing to Fragility
This fragility is largely explained by external factors beyond airlines’ control. Bottlenecks in the aerospace supply chain have pushed the average fleet age to record levels, increasing maintenance, leasing, and fuel consumption costs. Additionally, growing regulatory pressure, particularly in Europe, where environmental and passenger rights requirements advance without a clear assessment of their economic and competitive impact, adds to the structural costs.
Air Cargo: A Pillar of Resilience
In this context, air cargo emerges as a resilience pillar for the sector. Amidst growing commercial fragmentation and rising tariffs, air transport of goods has become a safety valve for global supply chains. IATA highlights that the agility, speed, and redirection capability of air cargo have been crucial in mitigating disruptions, expediting shipments, and maintaining the flow of high-value goods, from e-commerce to semiconductors linked to AI’s rise.
Underlying Risks
However, operational resilience cannot conceal fundamental risks. Geopolitical conflicts, airspace closures, navigation system interference, and persistent global trade weakness add structural costs. Moreover, the climate challenge looms: while committing to net-zero emissions by 2050 advances, sustainable aviation fuels (SAF) availability remains marginal and significantly more expensive, imposing an additional burden on already narrow margins.
The Latin American Scenario
For Latin America, the situation is particularly delicate. Despite solid demand growth and efficiency advances post-restructuring, currency volatility and dollarized cost dependence continue eroding profitability. IATA’s message is clear: without predictable regulatory frameworks, adequate infrastructure, and a more balanced value distribution within the aviation chain, traffic growth won’t automatically translate into a financially healthy sector.
The Path Forward
The airline industry has shown remarkable adaptability. Now, the challenge is to ensure this resilience doesn’t turn into resignation—ensuring air transport’s long-term sustainability and viability is crucial.
Key Questions and Answers
- What is the paradox in the global air transport industry? The industry has never transported more passengers or generated higher revenues, yet its profitability remains fragile due to slim margins and a value chain disparity.
- What factors contribute to the industry’s fragility? External factors like supply chain bottlenecks, regulatory pressures, and currency volatility contribute to the industry’s fragility.
- How does air cargo support the sector’s resilience? Air cargo offers agility, speed, and redirection capabilities, mitigating disruptions and maintaining high-value goods flow.
- What underlying risks does the industry face? Geopolitical conflicts, navigation system interference, and the climate challenge pose significant risks.
- What is the situation in Latin America? Despite growth and efficiency advances, currency volatility and dollarized cost dependence threaten profitability in the region.
- What is the industry’s path forward? The challenge is to ensure resilience doesn’t turn into resignation, focusing on long-term sustainability and viability.
