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IATA: Middle East Will Lead the World in Airline Profitability in 2026

International Air Transport Association (IATA) flags
International Air Transport Association (IATA) flags
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IATA: Middle East Will Lead the World in Airline Profitability in 2026

International Air Transport Association (IATA) flags
International Air Transport Association (IATA) flags

The International Air Transport Association (IATA) has said the Middle East will lead the world in airline profitability next year.

According to its outlook for the region as part of its 2026 global industry forecast, which it released on Thursday, 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,” IATA Regional Vice President, Africa and Middle East Kamil Al-Awadhi said.

“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,” he added.

According to IATA, 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%.

Despite positive performance, the region faces several structural challenges:

Blocked Funds: Of the $1.2 billion in airline funds blocked globally as of October 2025, 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.

Economic Disparities: Gulf Cooperation Council (GCC) states 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.

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,” said Al-Awadhi.

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Business

IMF and Arab Monetary Fund Sign MoU to Enhance Cooperation

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
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IMF and Arab Monetary Fund Sign MoU to Enhance Cooperation

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA

The International Monetary Fund (IMF) and the Arab Monetary Fund (AMF) signed a memorandum of understanding (MoU) on the sidelines of the AlUla Conference on Emerging Market Economies (EME) to enhance cooperation between the two institutions.

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki, SPA reported.

The agreement aims to strengthen coordination in economic and financial policy areas, including surveillance and lending activities, data and analytical exchange, capacity building, and the provision of technical assistance, in support of regional financial and economic stability.

Both sides affirmed that the MoU represents an important step toward deepening their strategic partnership and strengthening the regional financial safety net, serving member countries and enhancing their ability to address economic challenges.

Business

Saudi Chambers Federation Announces First Saudi-Kuwaiti Business Council

File photo of the Saudi flag/AAWSAT
File photo of the Saudi flag/AAWSAT
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Saudi Chambers Federation Announces First Saudi-Kuwaiti Business Council

File photo of the Saudi flag/AAWSAT
File photo of the Saudi flag/AAWSAT

The Federation of Saudi Chambers announced the formation of the first joint Saudi-Kuwaiti Business Council for its inaugural term (1447–1451 AH) and the election of Salman bin Hassan Al-Oqayel as its chairman.

Al-Oqayel said the council’s formation marks a pivotal milestone in economic relations between Saudi Arabia and Kuwait, reflecting a practical approach to enabling the business sectors in both countries to capitalize on promising investment opportunities and strengthen bilateral trade and investment partnerships, SPA reported.

He noted that trade between Saudi Arabia and Kuwait reached approximately SAR9.5 billion by the end of November 2025, including SAR8 billion in Saudi exports and SAR1.5 billion in Kuwaiti imports.

Business

Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
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Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).

Harvard University economics professor Pol Antràs said Saudi Arabia represents an exceptional model in the shifting global trade landscape, differing fundamentally from traditional emerging-market frameworks. He also stressed that globalization has not ended but has instead re-formed into what he describes as fragmented integration.

Speaking to Asharq Al-Awsat on the sidelines of the AlUla Conference for Emerging Market Economies, Antràs said Saudi Arabia’s Vision-driven structural reforms position the Kingdom to benefit from the ongoing phase of fragmented integration, adding that the country’s strategic focus on logistics transformation and artificial intelligence constitutes a key engine for sustainable growth that extends beyond the volatility of global crises.

Antràs, the Robert G. Ory Professor of Economics at Harvard University, is one of the leading contemporary theorists of international trade. His research, which reshaped understanding of global value chains, focuses on how firms organize cross-border production and how regulation and technological change influence global trade flows and corporate decision-making.

He said conventional classifications of economies often obscure important structural differences, noting that the term emerging markets groups together countries with widely divergent industrial bases. Economies that depend heavily on manufacturing exports rely critically on market access and trade integration and therefore face stronger competitive pressures from Chinese exports that are increasingly shifting toward alternative markets.

Saudi Arabia, by contrast, exports extensively while facing limited direct competition from China in its primary export commodity, a situation that creates a strategic opportunity. The current environment allows the Kingdom to obtain imports from China at lower cost and access a broader range of goods that previously flowed largely toward the United States market.

Addressing how emerging economies should respond to dumping pressures and rising competition, Antràs said countries should minimize protectionist tendencies and instead position themselves as committed participants in the multilateral trading system, allowing foreign producers to access domestic markets while encouraging domestic firms to expand internationally.

He noted that although Chinese dumping presents concerns for countries with manufacturing sectors that compete directly with Chinese production, the risk is lower for Saudi Arabia because it does not maintain a large manufacturing base that overlaps directly with Chinese exports. Lower-cost imports could benefit Saudi consumers, while targeted policy tools such as credit programs, subsidies, and support for firms seeking to redesign and upgrade business models represent more effective responses than broad protectionist measures.

Globalization has not ended

Antràs said globalization continues but through more complex structures, with trade agreements increasingly negotiated through diverse arrangements rather than relying primarily on multilateral negotiations. Trade deals will continue to be concluded, but they are likely to become more complex, with uncertainty remaining a defining feature of the global trading environment.

Interest rates and artificial intelligence

According to Antràs, high global interest rates, combined with the additional risk premiums faced by emerging markets, are constraining investment, particularly in sectors that require export financing, capital expenditure, and continuous quality upgrading.

However, he noted that elevated interest rates partly reflect expectations of stronger long-term growth driven by artificial intelligence and broader technological transformation.

He also said if those growth expectations materialize, productivity gains could enable small and medium-sized enterprises to forecast demand more accurately and identify previously untapped markets, partially offsetting the negative effects of higher borrowing costs.

Employment concerns and the role of government

The Harvard professor warned that labor markets face a dual challenge stemming from intensified Chinese export competition and accelerating job automation driven by artificial intelligence, developments that could lead to significant disruptions, particularly among younger workers. He said governments must adopt proactive strategies requiring substantial fiscal resources to mitigate near-term labor-market shocks.

According to Antràs, productivity growth remains the central condition for success: if new technologies deliver the anticipated productivity gains, governments will gain the fiscal space needed to compensate affected groups and retrain the workforce, achieving a balance between addressing short-term disruptions and investing in long-term strategic gains.