Five risks set to shape aviation in 2026

Amid mounting geopolitical and economic pressures, the airline industry entered 2025 facing tariffs and trade tensions yet still delivered a record net profit of US$39.5 billion. However, as Marie Owens Thomsen, Senior Vice President of Sustainability and Chief Economist at the International Air Transport Association (IATA), noted, the headline figure masks a fragile reality: airline net margins are expected to be just 3.9% in 2026, with profit per passenger of $7.90 – “below what Apple earns from selling one iPhone cover”.

Against this backdrop, Owens Thomsen has identified five major risks likely to shape aviation in 2026.

First is policy fragmentation. The weakening of the post-war multilateral system is spilling into aviation, with ‘me-first’ trade and climate policies undermining global networks. Competing frameworks for CO₂ regulation and fragmented tax regimes risk higher costs, limited environmental benefit, and “severe competitive distortions” across the industry.

Second, supply chain disruption remains acute. A record aircraft order backlog is not expected to unwind before 2031–2034. While constrained capacity has supported yields, it has also stalled fleet renewal, slowing gains in fuel efficiency and decarbonisation.

Third, climate-related disruption is intensifying. Extreme weather, commodity volatility and weaker international coordination threaten infrastructure, trade, and investment. Owens Thomsen warned that reduced global commitment to climate action would “undoubtedly slow progress”, while food and water insecurity could drive migration – even as governments become more hostile to it – with knock-on effects for air travel.

Fourth, cyber threats and artificial intelligence (AI) pose growing risks. Airlines’ dependence on critical digital infrastructure leaves them exposed, while AI may amplify cyberattacks, misinformation, and trust erosion. Evidence that AI will deliver broad productivity gains, she cautioned, “may take years to materialise”.

Finally, the macroeconomic outlook is mixed. A weaker US dollar and easing oil prices could benefit airlines, given that more than half their costs are dollar denominated. However, global growth is unlikely to accelerate, and converging risks leave little margin for policy error.

Even so, Owens Thomsen argued that aviation remains a powerful driver of progress. Supporting 87 million jobs and 4% of global gross domestic product (GDP), air transport, she said, can play a central role in delivering growth alongside the energy transition – if policymakers let it.

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