 11 December 2025 (Geneva, Switzerland) -- The International Air Transport Association (IATA) released its outlook for the Middle East as part of its 2026 global industry forecast, confirming the region will lead the world in airline profitability next year. Middle East carriers are expected to deliver the highest net profit margin globally (9.3%) and the highest profit per passenger ($28.6)—well above the global averages of 3.9% and $7.9 respectively. “The Middle East’s position as the most profitable region in 2026, in terms of profit margin and profit per passenger, underscores the benefits of strategic investment, supportive policy frameworks, and the region’s role as a global connecting hub. But this success is far from uniform. Several carriers continue to face severe financial pressure due to geopolitical instability, blocked funds, and uneven infrastructure development. Closing this gap must be a regional priority. A more harmonized regulatory approach and deeper cooperation will help ensure all markets can participate in—and benefit from—the region’s growth trajectory,” said Kamil Al-Awadhi, IATA Regional Vice President, Africa and Middle East. Strong Financial and Operational Performance Middle East airlines are forecast to generate $6.9 billion in net profit in 2026, reflecting the region’s strong fundamentals, including robust long-haul traffic, expanding hub capacity, and continued investment in infrastructure. By comparison, global industry net profit is projected to reach $41 billion, with a total of 5.2 billion passengers expected to travel worldwide. Cargo demand is expected to grow 2.6% globally, with Middle East cargo volumes remaining stable. The regional passenger market is forecast to reach 240 million passengers in 2026, supported by an expected 6.1% growth rate, outpacing the global average of 4.9%. Persistent Challenges Impacting Regional Development Despite positive performance, the region faces several structural challenges: - Blocked Funds: Of the $1.2 billion in airline funds blocked globally as of October, 43% ($515 million) is held in the Middle East and North Africa (MENA). Algeria now represents the largest share of blocked funds, driven by new approval requirements that have added administrative delays. Lebanon’s blocked funds remain static, representing legacy balances from 2019-2021.
- Geopolitical Instability: Conflicts in Yemen, Syria, Iraq, and Lebanon continue to restrict airspace and disrupt operations. Airlines face longer routings around closed or restricted airspace, increasing fuel burn, emissions, and flight times. Sanctions and rising GNSS interference, including spoofing and jamming, add further complexity.
- Economic Disparities: GCC States—including the UAE, Qatar, and Saudi Arabia—have made significant progress in building world-class aviation systems. In contrast, lower-income countries such as Yemen, Lebanon, and Syria face outdated infrastructure, under-resourced aviation authorities, and limited investment capacity.
Advancing Regional Coordination IATA underscored the importance of greater cooperation to unlock aviation’s full potential in the Middle East. Key priorities include: - Advancing Toward a More Integrated Air Transport Market to improve connectivity and reduce market fragmentation.
- Ensuring Fair and Proportionate Consumer Protection by aligning national regulations with ICAO principles and global best practices.
- Supporting States Emerging from Sanctions to safely reintegrate into the global aviation system, including access to aircraft, financing, and international standards.
“Greater regional coordination is essential for the Middle East to realize its full aviation potential. An integrated air transport market, fair consumer protection rules, and clearing blocked funds will strengthen connectivity and efficiency across the region. And for states emerging from sanctions, creating clear pathways for safe reintegration is vital. By working together on these priorities, the region can ensure that aviation’s benefits are shared more evenly and sustainably,” said Al-Awadhi.
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