Arab Airlines Project $4.3B Net Loss for 2026 After a $11B Profit Year
The Arab Air Carriers' Organization expects a sharp reversal in 2026 as regional conflict, higher energy costs and disrupted operations cut into demand and margins.
Arab airlines are heading for a net loss of about $4.3 billion in 2026, a swing from roughly $11 billion in net profit the year before, according to the Arab Air Carriers' Organization.
The group pointed to regional conflict, higher energy costs and operational disruptions as the pressures behind the reversal. Secretary General Abdul Wahab Teffaha presented the State of the Industry report on Tuesday at AACO's 59th Annual General Meeting in Doha, Qatar.
The regional numbers move in the same direction. Arab carriers' revenue passenger kilometres are forecast to drop 10.3% in 2026, while available seat kilometres fall 4.7%. Passenger load factor could slip to 77%. The operating margin is projected at -2.7%, compared with 11.8% in 2025.
Globally, the picture is one of slower growth rather than contraction. Passenger demand growth is expected to ease to 2.1% in 2026, seat capacity is set to rise 1.6%, and the worldwide load factor is forecast at 83.9%.
Last year was strong. AACO members carried 7.6% more passengers in 2025 and moved 4% more cargo. Net profit reached about $11 billion on a net margin of 10.8%. Airport passenger traffic across the region grew 8.1% to more than 500 million.
That base makes the 2026 forecast steeper than a single bad quarter would suggest. A 10.3% fall in demand against a 4.7% cut in capacity leaves aircraft flying with emptier cabins, and a load factor near 77% compresses the unit economics that produced last year's double-digit margin. Carriers cannot shrink fleets and schedules as fast as demand moves.
Members also adopted resolutions at the meeting. One opposed a European Commission proposal to extend the EU Emissions Trading System from 2029 to flights leaving the European Economic Area for third countries within 5,000 km of Frankfurt Airport. AACO described the plan as unilateral and inconsistent with state sovereignty under the Chicago Convention, and raised concern that airlines could pay twice for emissions cuts under sustainable aviation fuel mandates and CORSIA.
A second resolution condemned attacks on civilian airports, aircraft, crews, passengers, aviation workers and infrastructure across the Arab region. The 60th annual meeting will be held in Egypt in 2027.
