Overall, the airline industry had a solid year in 2025 and is expected to continue growing in 2026. Growth is being limited by airplane manufacturers’ inability to ramp up deliveries and the 5,000+ « lost » deliveries over the last ten years. The lack of replacement aircraft is expected to keep load factors high, at around 83.8%. This is expected to boost airline yields and profits.

While growth is expected to continue in 2026, it should be noted that the airline industry is susceptible to unforeseen shocks that can completely undo all forecasts. Examples of dramatic airline industry shocks in the 21st century include the September 11 attacks and the COVID-19 pandemic. Here is what to know about forecasted aviation growth in 2026.

Passenger Aviation Is Set To Increase

According to current projections, the world’s airline capacity is set to continue to grow in 2026. IATA is forecasting a 4.9% year-on-year growth in passenger traffic. The growth is measured in Revenue Passenger Kilometers or RPK. This expansion is led by the 7.3% expected growth in the Asia Pacific region. The 4.9% growth presents a small decline in growth compared with 2025 due to supply constraints; more on aircraft availability later.

Origin-destination passengers are expected to increase from 4,269 million to 4,458 million, while the number of flights is expected to increase from 38.9 million to 40.3 million. Total revenue is expected to be $1,053 billion, with $751 billion coming from passenger transport, $158 billion from cargo, and the rest from other sources. Passenger growth per region is 6.0% for Africa, 7.3% for the Asia-Pacific, 3.8% for Europe, 6.6% for Latin America, 6.1% for the Middle East, and just 1.5% for North America.

There are plenty of issues facing the industry that could constrain its ability to expand. One issue facing the industry is an aging pilot workforce. In the United States, the median age of an active air transport pilot license holder has increased from 45 to 49 in 1999 to 50 to 54 in 2024. The share of those nearing mandatory retirement has more than doubled. There is also an issue with fewer younger cohorts coming into the system.

Uncertainty Aiding Air Cargo

In 2025, the Trump administration dialed up the trade wars. This resulted in a volatile trade policy, with dramatic tariffs announced that were set to take effect in a relatively short period. IATA noted that air cargo came to « everybody’s rescue », serving as a critical enabler of rapid adaptation, allowing goods to arrive ahead of the announced tariff deadlines. It facilitated the « swift rerouting of China’s exports to alternative markets. »

Going into 2026, air cargo remains well-positioned to « remain robust. » It is expected to benefit from AI-driven investment, growing demand for high-value time-sensitive goods, and a structural shift toward e-commerce. Sea-borne cargo is typically the cheapest mode of transportation for most goods, but the calculus changes in periods of uncertainty. Sea-borne cargo can take weeks to reach the destination, while air-borne cargo takes hours.

Airlines holding onto passenger aircraft is also negatively affecting the cargo sector, as it is interfering with the typical passenger-to-freighter conversion cycle. It adds, « The freighter fleet is aging, with many retirements postponed during the pandemic, stretching aircraft lifespans beyond planned thresholds. » Overall, IATA is expecting air cargo to grow by 2.6% in 2026. It can also be noted that the world’s MD-11 freighter fleet remains grounded following the crash of UPS Airlines Flight 2976. It is unclear how this will affect FedEx and UPS in 2026.

Higher Airline Profit Expected For 2026

As stated, despite turbulent times, profit margins are expected to be up, partly thanks to higher load factors and high fleet utilization. The global airline industry is expected to top $1 trillion for the first time in 2025. A record high net profit of around $41 billion is expected for the airline industry in 2026. While this may sound like a big figure, it highlights how little overall profit is made by the airline industry.

For example, the net profit for Apple alone was almost three times more at $112 billion for fiscal 2025, while Microsoft’s net profit for the same period was $102 billion. Alphabet (Google) was the most profitable company by absolute net profit at $124 billion. According to Visual Capitalist, the top ten performing companies all recorded a higher net profit than all the world’s airlines combined.

In 2026, the net margin for airlines is expected to hold steady at 3.9%. The airline industry remains a low-margin industry with many airlines having a net profit of around a typical cup of coffee per passenger. With African airlines, net profit per passenger can fall as low as $1 per passenger. Regionally, Europe is expected to set its highest net project, the Middle East will continue to see the highest profit margins, while the picture remains mixed for other regions.

Lack Of Aircraft (& Engines)

While the demand for more air travel may be there, airplane makers, especially Boeing and Airbus, have underdelivered for years. That said, they are recovering, even if Boeing’s MAX 7, MAX 10, and 777X have been delayed again. In 2018, a total of 1,816 commercial aircraft were ordered; this fell to 1,408 in 2019 and then to a low of 806 during the pandemic in 2020. After that, the orders recovered to 1,040-1,377 between 2021 and 2024. The expected orders are 1,631 for 2025 and are still below 2018 levels.

Orders in 2026 are expected to climb to 2,184 and then 2,460 in 2027. IATA shows 5,340 missing aircraft deliveries « compared with the theoretical pre-pandemic trend, » although the decline in deliveries actually started the year earlier in 2019 due to the Boeing MAX crisis. The agency shows forecast 2026 deliveries returning to the pre-COVID trend and an end to the theoretical aircraft delivery deficit.

The main issue with ramping up deliveries is engines. This makes it less of a Boeing and Airbus problem and more of a Pratt & Whitney, Rolls-Royce, GE/CFM problem. Not only are these companies struggling to deliver engines, but a record number of engines are also undergoing maintenance. The engine shortage is forcing airplane makers to « increasingly assembling aircraft without engines and placing them in storage until powerplants become available. This mismatch between airframe and engine readiness is compounding delivery delays and tightening fleet availability.« 

Cirium Also Predicting A 3.6% Capacity Growth

Cirium, an aviation analytics company, is also expecting a 3.6% growth in seat capacity for 2025 with « similar trends anticipated for 2026. » Cirium also notes aircraft supply shortages, saying that during the pandemic, it is estimated that over 3,600 aircraft deliveries from Airbus and Boeing were cancelled or deferred. It notes the situation has gradually improved with both airplane giants ramping up their production rates.

The airplane deficit is particularly noticeable for widebody aircraft. Cirium Ascend analysis estimates that single-aisle passenger aircraft have a shortage of fewer than 200 aircraft. Meanwhile, the deficit for widebody aircraft is around 700 units. This deficit is much more stark when considering that 71% of the aircraft flying are narrowbody aircraft.

Boeing’s deliveries in 2025 have improved significantly after the bad year of 2024. By the end of November 2025, it had delivered 537 aircraft compared to just 318 aircraft in the same period in 2024 (a 69% increase). Still, Boeing’s deliveries are lower than 2018 levels, and Airbus plans to deliver 790 aircraft in 2025. Cirium states, « In summary, the outlook for passenger demand in 2026 remains robust, supported by continued recovery in international travel, easing supply constraints, and sustained growth in emerging markets. »

Long-Term Aviation Growth To 2044

It should be noted that shorter time frames, like 2026, are subject to volatility. Trade wars, real wars, pandemics, etc., can massively impact the year’s aviation growth. Regardless of such shocks that may impact a given year, it is expected that in the long-term, the aviation industry will continue to grow. Cirium Ascend Consultancy predicts 46,500 aircraft will be delivered globally over the next 20 years.

The forecasts are broadly in alignment with the forecasts from Boeing and Airbus. Looking forward, Asia is expected to continue to drive fleet growth and will account for 45% of deliveries. China and India are leading the demand in Asia. Furthermore, it expects Airbus and Boeing to continue to dominate the industry, being projected to deliver 85% of the aircraft and 92% of the value through 2044.

China’s state-backed COMAC is expected to grow and capture around 6% of the global demand. In the next 20 years, Airbus expects demand for 43,420 new passenger and freighter aircraft and a traffic growth rate of 3.6% (RPKs). The new aircraft will include 34,250 narrowbody aircraft and 9,170 widebody aircraft, with 10% of the widebodies being freighters.