IATA: Asia-Pacific Fuels Record Global Aviation Profits, Outlook Strong for 2026

The International Air Transport Association (IATA) announced a robust recovery in the global air travel market, which has now returned to pre-pandemic levels. The industry anticipates a strong performance through 2026, projecting a record combined net profit of US$41 billion for airlines worldwide, an increase from US$39.5 billion in the current year. This optimistic outlook is largely driven by the Asia-Pacific region, which IATA expects to lead global traffic growth. Load factors in the region are forecast to reach an all-time high of 84.4 percent next year.

Passenger demand remains particularly strong in Asia-Pacific, with China and India spearheading regional expansion. This growth is fueled by a significant rebound in tourism and the increasing affluence of the middle classes. Notably, direct flights between China and India resumed in late October after a five-year hiatus, further boosting connectivity. Visa relaxations, including China's unilateral policies for foreign travelers and other countries easing rules for Chinese visitors, have also stimulated travel demand. Despite this positive momentum, the sector faces headwinds such as overcapacity and a slower recovery in international air traffic, which impacts yields. Deflationary pressures within China are also contributing to lower yields in the country. Geopolitical conflicts persist as the primary source of volatility, though Asia-Pacific is considered the most stable aviation region.

In the air freight sector, IATA reported a mixed picture. While Chinese exports to the United States experienced a decline, the impact of trade frictions was mitigated by a shift towards alternative markets. Shipments from China to European and Southeast Asian markets saw increases, and robust demand for e-commerce product transport provided additional support for growth. For the first eleven months of the year, China's exports to the Association of Southeast Asian Nations (ASEAN) grew by 8.5 percent, and to the European Union by 5.4 percent, even as exports to the US fell by 16.9 percent. However, IATA cautioned that trade tensions will continue to present challenges for the cargo transport market in the coming year.