Asian airlines expected to drive global aviation growth in 2026

The International Air Transport Association (IATA) expects 2026 to deliver continued growth for the airline industry, with Asia positioned as the primary driver of passenger and cargo expansion.

“The air transport industry continues to demonstrate resilience amid persistent non-fuel cost pressures and operational constraints,” IATA noted, highlighting the sector’s ability to absorb rising operational costs while maintaining profitability.

The trade body projects stronger revenue growth as carriers offset softer yields through ancillary services and efficient fleet deployment. “Cost discipline is central to sustaining profitability in this low-margin business. While fuel prices have stabilized, non-fuel costs, particularly labor and maintenance, are rising due to pilot shortages, wage inflation, and aging fleets,” IATA added.

In the Philippines, domestic carriers continue to recover. Passenger fuel surcharges have held steady, while jet fuel prices declined 3.8% to $86.73 per barrel (€77.87), down 12.4% year-on-year.

Passenger volumes for the nine months to September rose 6.25% to 46.84 million, with domestic traffic up 5.36% to 24.95 million and international passengers up 7.25% to 21.89 million.

PAL Holdings, operator of Philippine Airlines, reported a net income rise of 33.58% to P9.03 billion (€126.4m), supported by passenger revenue of P116.56 billion (€1.63bn), cargo P6.71 billion (€94m), and ancillary services P12.67 billion (€177m). Cebu Air, operator of Cebu Pacific, reversed a prior loss, posting net income of P5.03 billion (€70.4m) on consolidated revenue of P66.90 billion (€936m). Passenger revenue more than doubled to P46.13 billion (€646m).

IATA’s outlook underscores Asia’s role as a key engine for aviation growth, supported by robust domestic traffic and improving international connectivity.

Explore the full regional airline performance and projections for 2026 in detail in the complete story.

Photo credits to Philippine Airlines’ official website