Travellers could face fewer fare specials, higher ancillary charges and reduced route options as airlines prepare for a sharp decline in profitability.
According to IATA, airlines are expected to achieve a combined total nett profit of US$23bn (R372,8bn) in 2026, roughly half the previously projected $41bn (R664,5bn).
“A structurally weakened airline industry invests less in product, routes, and recovery. Passengers in markets served by financially fragile carriers face fewer choices and higher prices over time,” said Marco Ciocchetti, CEO of XL Travel.
Airlines are expected to respond by cutting costs and improving efficiency. “This could include reducing capacity on weaker routes, optimising schedules and delaying fleet expansion plans,” said Stefan van der Merwe, CEO of Sure Travel.
Fuel surcharges
According to Van der Merwe, the introduction of fuel surcharges earlier this year was an immediate reaction to increased fuel costs and pressure on airline profitability.
“Airfares booked in advance will affect profitability as surcharges were not included in the old airfare. Other than that, airlines are covered by fuel increases with added surcharges so airline profits should not be severely impacted,” said Jonathan Gerber, CEO of TAG Travel.
Higher ancillaries
One of the first effects travellers are likely to notice is higher ancillary charges.
According to Euan McNeil, MD of Flight Centre Travel Group South Africa, IATA data shows ancillary revenues are projected to grow 12,6% this year. “In a high-cost environment, unbundling fares allows airlines to keep base prices accessible while giving passengers the choice of what to add.”
Ciochetti said this might make the base fare look reasonable, but the total cost of the trip would be noticeably higher due to aggressive charges on baggage, seat selection and priority boarding.
According to McNeil, passengers will also notice the disappearance of promotional fares. “When airlines are profitable and competitive, they use promotional pricing to stimulate demand. When margins are under pressure, that promotional activity becomes more difficult to sustain. Passengers who’ve been conditioned to wait for a sale will find that strategy increasingly unreliable.”
Demand remains strong
The drop in profitability will unlikely reduce demand for travel, according to Van der Merwe.
The IATA figures show total industry revenues are actually growing, projected to reach $1,1 trillion (R17,8 trillion) in 2026.
“What’s being squeezed is the margin. Airlines are still flying and still filling seats. Load factors are forecast to reach 84% this year – an increase on 2025. However, the financial buffer that allows airlines to absorb shocks, invest in new aircraft, and maintain competitive pricing is thinner than it was 12 months ago,” said McNeil.
Destinations that are already underserved could become more so. “The first routes to disappear would be the marginal ones. Other than that, I don’t expect much to change. Travel is a dynamic industry, this won’t be the first or last crisis to hit the industry,” said Gerber.
Last year’s profits
The outlook marks a sharp reversal from 2025, when airlines achieved record-breaking profits, but fares were still high.
“Last year, strong travel demand combined with aircraft shortages, operational constraints and limited capacity allowed airlines to maintain higher fares despite improved financial performance,” said Van der Merwe.
Higher profits did not necessarily translate into lower fares in 2025. “Much of the post-pandemic airline profits went towards rebuilding balance sheets rather than reducing fares. When you factor in rising fuel costs, soaring aircraft lease rates and higher labour costs, airlines had very little room to pass savings on to passengers, even in a good year,” said Ciochetti.
What’s changed in 2026 is that costs have surged dramatically. “Fuel alone is up nearly 70% year-on-year and demand, though still strong, is showing signs of sensitivity. South African travellers feel this particularly, given the rand’s purchasing power,” said McNeil.
