The aviation industry will lose $100 billion due to the war in the Middle East: what will happen to airfare prices in 2026?

Due to the sharp rise in oil prices following the start of the war in Iran, the global aviation industry faces $100 billion in additional fuel costs in 2026. Find out how this will affect airfare prices, airline profits, and what travelers can expect

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The global aviation industry is facing one of its toughest years in the past decade. The reason is the sharp rise in oil prices following the outbreak of war in Iran in March 2026. According to data from the International Air Transport Association (IATA), cited by The Independent, the industry’s additional spending on jet fuel this year will reach about $100 billion.

IATA Director General Willie Walsh explained the scale of the problem directly: “When the war began in the Middle East in March, oil prices rose, and the cost of jet fuel skyrocketed. As a result, we expect average jet fuel prices to be 70% higher on an annualized basis, adding $100 billion to our total fuel costs this year".

Read also: Scorching heat is changing vacation plans—where are tourists going instead of the Mediterranean?

Airline profits will nearly halve

The impact on the industry’s financial results has been predictably painful. According to the IATA report on the state of global aviation, despite the fact that demand for air travel “remains steady,” carrier profitability in 2026 is expected to nearly halve—from $43 billion in 2025 to $23 billion in 2026.

Walsh specifically noted that this difficult year will hit two categories of players particularly hard: airlines that have not yet fully recovered from the effects of the COVID-19 pandemic, and carriers from the Gulf states, whose business is directly tied to the conflict region.

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What passengers themselves think: most expect ticket prices to rise

The results of passenger surveys conducted as part of the IATA study are also telling. 86% of travelers expect airfare to fluctuate in line with oil prices—meaning most are fully aware of the link between geopolitics and flight costs.

At the same time, nearly half of those surveyed predict they will spend more on travel this year than last. This indicates that demand for air travel remains steady even amid rising costs—people are more likely to adjust their budgets than to cancel trips.

When planning a trip amid rising costs, it’s also worth considering medical insurance — you can purchase a policy for travel abroad online and hassle-free through Visit Ukraine.

Aircraft supply issues: another blow to the industry

In addition to the fuel crisis, the aviation industry is suffering from systemic problems in the supply chains of the aircraft manufacturing sector. IATA noted that aircraft and aircraft engine manufacturers are consistently failing to meet their commitments to deliver equipment on schedule.

The scale of the delays is staggering: the backlog of unfulfilled orders currently exceeds 18,000 aircraft. According to the association’s estimates, these delays cost airlines $11 billion in 2025—and this problem has not gone away in 2026. Airlines cannot increase their capacity as planned, which limits their ability to respond to demand and optimize costs.

We remind you! The EU has nearly completed its reform of air passenger rights: the three-hour delay threshold for compensation will remain, and the application process will be simplified. Read what compensation amounts will remain in effect, what new obligations will arise for airlines, and when the new rules will take effect.

Photo: jannoon028 / Freepik

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