{"id":995,"date":"2026-06-08T20:13:57","date_gmt":"2026-06-08T20:13:57","guid":{"rendered":"https:\/\/crosscountrymovingteams.com\/?p=995"},"modified":"2026-06-08T20:13:57","modified_gmt":"2026-06-08T20:13:57","slug":"the-global-airline-industrys-profits-could-be-cut-in-half-as-it-braces-for-its-worst-year-since-the-pandemic","status":"publish","type":"post","link":"https:\/\/crosscountrymovingteams.com\/?p=995","title":{"rendered":"The global airline industry\u2019s profits could be cut in half as it braces for its worst year since the pandemic"},"content":{"rendered":"
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The airline sector\u2019s net profit for the year is projected to collapse to $23 billion from $45 billion in 2025, while its net margins plummet to 2%, less than half of the 4.2% they were last year, said Willie Walsh, the outgoing director general of the International Air Transport Association (IATA).<\/p>\n

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Some of the airlines that could be most affected are those with weaker balance sheets and those that serve the Persian Gulf, he added.\u00a0<\/p>\n

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Driving this contraction is the Iran war, which has now stretched into its fourth month. It has forced airlines to reroute flights to avoid conflict zones in the Middle East, making planes burn more fuel.<\/p>\n

But more importantly, Tehran\u2019s subsequent actions to cut off the Strait of Hormuz, through which 20 million barrels of oil a day passed before the war, has sent oil and fuel prices soaring.<\/p>\n

Fuel prices are set to come in 70% higher year over year, which will add $100 billion to the industry\u2019s collective fuel bill, Walsh said in a report on the state of the industry published Sunday.<\/p>\n

For now, air travel remains steady, and the IATA sees a strong summer peak season ahead. As air fare prices have climbed 20% this year, some airline CEOs have said travelers, especially at the higher end, are still buying. United Airlines CEO Scott Kirby, told Bloomberg on Sunday that he\u2019s been surprised that demand has been less price-sensitive than he expected.<\/p>\n

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Most consumers expect flight prices to increase in line with oil prices, and about half of them expect to spend more on flights this year, said Walsh, who is leaving the IATA to become CEO of Indian airline IndiGo. But this resilience may not last forever.\u00a0<\/p>\n

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\u201cThe big unknown is how long travelers and shippers can tolerate the higher costs of connectivity,\u201d he said.<\/p>\n

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The Iran war is bringing the airline industry to a low point it hasn\u2019t seen since its profits began to recover after the COVID-19 pandemic. The 2020 results were the worst in aviation, when the industry faced a cumulative loss of more than $137 billion. By 2023, the industry reported a , and cumulative profits continued to increase from there.\u00a0<\/p>\n

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It\u2019s unclear how much longer the Iran war may last. While representatives from Washington and Tehran have met several times, including a high-level meeting in Pakistan in April, a ceasefire between the two nations remains fragile and the situation is tense.\u00a0\u00a0<\/p>\n

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The conflict threatened to explode again on Monday, when Iran and Israel fired missiles at each other before both sides backed down.<\/p>\n

Despite the current disruptions, Walsh said the advent of AI and the tech\u2019s potential to boost efficiency, reduce costs, and improve the customer experience shows that the industry is well prepared for the future.<\/p>\n

\u201cThe next five to 10 years could be some of the most exciting times for airlines,\u201d he said.<\/p>\n

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Iran’s grip on the Strait of Hormuz is adding $100 billion to airlines’ collective fuel bill this year.<\/p>\n","protected":false},"author":1,"featured_media":994,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[214],"tags":[],"class_list":["post-995","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-airline-industry"],"yoast_head":"\nThe global airline industry\u2019s profits could be cut in half as it braces for its worst year since the pandemic - Cross Country Moving Team<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/crosscountrymovingteams.com\/?p=995\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The global airline industry\u2019s profits could be cut in half as it braces for its worst year since the pandemic - 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