IATA Cuts 2026 Airline Profit Forecast by 35% Amid Iran War Fuel Shock

The International Air Transport Association (IATA) has revised its 2026 global airline profit forecast downward by around 35%, citing a sharp rise in jet fuel costs triggered by the ongoing Iran war and disruption in the Strait of Hormuz. According to industry-linked estimates and Moody’s sector outlook, jet fuel prices have surged by more than 20% since May, with refinery margins widening significantly and pushing operating costs across global carriers.

The crisis has also forced airlines to reprice tickets, particularly on long-haul transatlantic routes, where fares are rising weekly as carriers attempt to offset fuel-driven losses. Analysts warn that the fuel shock is eroding earlier expectations of a record industry profit year, replacing it with uneven performance across regions.

While major airlines with strong hedging positions remain relatively protected, many carriers—especially in Asia and Latin America—face mounting pressure from volatility, supply chain disruptions, and constrained capacity growth.