Aircraft shortage still haunts airlines despite record load factors

2026 is expected to be a golden year for the global aviation industry, buoyed by economic recoveries in several countries and the aftermath of a low-growth year in 2025, which makes comparisons look favorable.

According to the Global Outlook for Air Transport-Trade, AI, and the Energy Transition report by IATA (International Air Transport Association), global passenger traffic is projected to grow by 4.9% in 2026, a slight improvement reflecting global GDP growth.

Passenger numbers are forecast to rise by 7.3% compared to the previous year, driven by strong economic momentum in markets like China, India, and Vietnam, boosting both domestic and international travel.

Global passenger load factors (PLF) have reached record highs, with the peak of 86% in August 2025 marking the highest monthly figure in aviation history. The average PLF for the year is expected to be 83.7%, slightly above the 2024 level.

"This performance is supported by strict capacity management, strong demand, and high aircraft utilization," IATA said, adding that PLF will increase slightly to 83.8% in 2026 as airlines continue to grapple with aircraft shortages, limiting available seats.

Despite these positive figures, passenger revenues are expected to drop by 0.7% year-on-year, a more favorable outcome than the earlier projection of a 4.1% decline.

Airlines have been supported by slightly higher-than-expected fuel prices and ongoing aircraft supply constraints. These factors have allowed airlines to maintain pricing power, particularly on high-demand routes.

Additionally, the weakened U.S. dollar has helped support revenues in non-dollar-denominated markets, and strong demand for premium seats has further helped airlines maintain profitability.

In 2026, global passenger revenues are expected to remain stable compared to 2025, as fuel prices are expected to stabilize.

Paweena Jariyathitipong, Acting Director-General of Airports of Thailand (AOT), stated that AOT has studied opportunities to increase international flights through the six airports under AOT’s management.

Given the current situation, AOT has implemented measures to promote the aviation market, offering service fee discounts and incentives for airlines that replace canceled flight slots.

The AOT board approved these measures during its 19th meeting of 2025 on December 24, 2025. These measures will run from January 1 to March 28, 2026, aiming to encourage airlines to return to Thailand more quickly, reduce revenue losses from canceled slots, and increase AOT's market share.

This initiative is not only aimed at restoring flights and passengers but also at ensuring long-term sustainability in slot management, strengthening market structures, and laying a solid foundation for the future of the aviation industry.

Paweena emphasized that these measures will help increase international flights and passenger numbers during the high season, positively impacting tourism, employment, and national income. She reiterated AOT's role as a key organization in driving Thailand's economy through sustainable aviation growth.

The IATA report further noted that record load factors and high aircraft utilization, combined with rapidly growing ancillary revenue streams, will help airlines maintain strong profits despite ongoing challenges.

A net profit of $41 billion is projected for 2026, with a steady net profit margin of 3.9%. This remarkable success should be achievable despite lower fares and continuous cost pressures. However, the airline industry remains a sector with relatively low profit margins.