Global airline profits will reach $41 billion this year, according to analysis by aircraft leasing firm Avolon, as strong passenger demand and relatively favourable fuel prices support the sector’s continued recovery from the pandemic.
In its 2026 aviation outlook, the Dublin-based lessor said the industry has entered a more stable phase after several turbulent years, with growth increasingly driven by emerging markets in Asia and the Middle East. India, the United Arab Emirates and Saudi Arabia are expected to lead expansion over the coming years, supported by rising incomes, improving demographics and expanding international travel networks.
Avolon, one of the world’s largest aircraft leasing companies, said these three markets alone currently hold orders for around 3,000 aircraft, with roughly 900 scheduled for delivery over the next three years. Jim Morrison, Avolon’s chief risk officer, said the strength of these economies reflects a broader shift in global aviation demand.
“What we’ve seen is that there’s a handful of emerging countries that are benefiting from growing middle class populations, improving demographics, as well as the strength of global connecting business models,” Morrison said.
In Europe, airlines are also benefiting from supportive market conditions. Morrison noted that European carriers led the world in profitability in 2025 and are expected to repeat that performance in 2026. The region’s aviation market is becoming increasingly concentrated, with major airline groups expanding their influence through acquisitions and partnerships. Air France-KLM has increased its stake in Scandinavian carrier SAS, while Lufthansa has strengthened its position in Italy’s ITA Airways.
Despite strong demand across multiple regions, growth remains constrained by delays in aircraft production. Ongoing backlogs at Boeing and Airbus mean many airlines are unable to expand capacity as quickly as passenger numbers are rising. Avolon estimates that around 4,000 aircraft were not built this decade after manufacturers cut production during the pandemic, creating a tight supply environment.
That imbalance is benefiting leasing firms, which are seeing sustained demand for their fleets as airlines seek alternative ways to add capacity. Morrison said the undersupply of new aircraft continues to support long-term leasing demand.
The industry is not without risks. Morrison pointed to rising political and geopolitical uncertainty, noting that aviation has historically proven resilient through major shocks, including the September 11 attacks, the COVID-19 pandemic and recent interest rate increases.
Concerns over a recession in Europe and the United States have eased in recent months, helping to stabilise passenger demand. Pressure on airlines to reduce emissions has also softened, partly due to policy changes in the United States. Even so, Morrison said environmental performance remains a priority for the sector.
He added that newer aircraft entering service today offer significantly improved fuel efficiency and remain the most effective way for airlines to reduce carbon intensity while meeting rising demand.
