January 22, 2026

Geopolitics Adds New Uncertainty to Airline Planning
Airlines cannot realistically predict such events
Tourism-dependent markets like the Caribbean are especially vulnerable
Travellers may delay bookings or change destinations, increasing demand volatility
Ongoing political rhetoric around immigration, trade, and Latin America adds another layer of uncertainty
The country has an order book of ~3,000 aircraft
Indian carriers are pushing to reclaim long-haul traffic from Gulf and Turkish airlines
Air India alone expects a major transformation in international services by 2026
Refurbishment of Air India’s domestic fleet
Reconfiguration of Boeing 787s and 777s with new cabins
Aircraft delivery delays limit growth
Infrastructure struggles continue to test execution2026 Industry Forecast: Strong Demand, Thin Margins. According to IATA’s latest forecasts (released before the Venezuela events):
Global average load factor: ~84% (a record)
Industry revenues: Just over $1 trillion
Net profit: ~$41 billion
Net margin: ~3.9%
Regional Profitability Shifts :A notable forecast shift:
Europe could overtake North America in total airline profitability for the first time
Europe: ~$14 billion profit, ~4.9% margin
North America: ~$11.3 billion profit, ~3.4% margin
The Middle East remains the most profitable region, with margins near 15%
European airlines still struggle with low margins and limited investment capacity
US Airlines: Growing Divide Between Winners and Losers In the US market:
Delta and United account for roughly 90% of industry profitability
Low-cost and smaller carriers face mounting pressure
Heavy exposure to the Caribbean
Vulnerable to sudden geopolitical disruptions
Ongoing discussions around restructuring or merger options
Premium and corporate travel are recovering
Inflation-hit consumers are struggling to afford economy fares
Filling main cabins profitably remains a major challenge
Aircraft Shortages Will Continue to Shape the Industry: Supply-chain issues remain severe:
~4,000 aircraft grounded globally
~5,000 aircraft delivery shortfall versus original plans
Backlog of 17,000 aircraft—equal to 60% of the global fleet
Fuel efficiency improvements have stalled due to older aircraft staying in service
Aircraft Orders Will Continue—Despite Long Wait Times.Airlines want more efficient aircraft, but:
Delivery timelines stretch 5–6 years
Engine shortages and certification delays persist
Leasing companies are expected to play a bigger role by offering flexibility
Will Air Travel Demand Hold Up in 2026?
Global appetite for air travel remains strong
Growth is strongest in India, Latin America, Africa, and parts of Asia
Regional variations will persist (Europe and US may see softer periods)Contradictions define the 2026 airline outlook:
Strong passenger demand
Severe aircraft shortages
Geopolitical unpredictability
Thin margins and uneven profitability