The International Air Transport Association (IATA) announced Tuesday that the global aviation sector is positioned to achieve unprecedented profitability in the coming year (2026), even as manufacturers grapple with persistent supply chain disruptions that are hampering aircraft production and delaying the introduction of newer, more efficient models.
This forecast emerges amid significant operational challenges for major aircraft producers. Airbus recently reduced its 2025 delivery expectations after discovering quality concerns with metal fuselage components on its A320 aircraft line. Both Airbus and Boeing have struggled to meet delivery commitments to airline customers over recent years, creating a ripple effect throughout the industry.
Airlines have expressed frustration that without access to these next-generation, fuel-efficient aircraft, they face limitations in reducing operational costs even as passenger demand increases.
European Carriers Lead Profit Margins
Despite these headwinds, IATA’s outlook remains positive, with particular emphasis on European carriers, which are now surpassing their American counterparts in net profit per passenger.
Willie Walsh, IATA’s director general, emphasized the industry’s newfound stability: “Airlines have successfully built shock-absorbing resilience into their businesses that is delivering stable profitability.”
Walsh acknowledged that declining jet fuel costs may provide some economic relief, but noted that mounting regulatory expenses—particularly in Europe—along with geopolitical instability, unauthorized drone activity, and GPS disruption continue to constrain profit potential.
Shifting Confidence Between Major Manufacturers
Walsh observed a notable change in industry sentiment regarding the two major aircraft producers. He suggested that trust in Airbus has diminished while Boeing’s reputation has strengthened despite ongoing supply chain complications.
The European manufacturer recently lowered delivery projections after discovering defects in fuselage panels, coming shortly after issuing a recall affecting 6,000 A320-series aircraft due to a software vulnerability related to cosmic radiation exposure.
“I think we are seeing a shift where it’s generally recognised that Boeing’s performance has significantly improved. People have a lot more confidence in Boeing delivering the commitments that they have made, and we’re seeing people having less confidence in Airbus,” Walsh observed.
He expressed concern about the broader industry implications: “It’s disappointing for the industry, because we will have fewer new aircraft being delivered than was expected.”
Airbus reduced its targets by 4% and acknowledged that November deliveries had already decelerated. This slowdown occurred just weeks after the A320 family, particularly the popular A321 variant, overtook Boeing’s 737 MAX as the most-delivered passenger aircraft in aviation history.
Engine Suppliers Face Criticism
Walsh also directed criticism toward engine manufacturers, indicating they have fallen behind airframe producers in delivering both new engines and serviced units, which forces aircraft makers to extend delivery schedules.
“It has appeared to us, given the way pricing has evolved on the supplier side and the margins that we see for these OEMs that they’re much higher than you would expect given the issues that have been encountered,” Walsh commented.
During a media briefing, Walsh characterized engine manufacturers’ profit margins as “far too high” considering the persistent difficulties they face, specifically citing GE Aerospace as an illustration of this pattern.
