Arab airlines affiliated with the Arab Air Carriers Organization (AACO) are expected to post a combined net loss of $4.3 billion, or approximately €3.82 billion, in 2026. The forecast is included in the organization’s annual report and was presented during the general assembly in Doha.
AACO brings together 39 airlines from the Middle East and North Africa, including Qatar Airways, Emirates, Etihad Airways and Gulf Air. The report states that geopolitical uncertainty, conflicts in the region, higher energy costs and ongoing operational disruptions have put pressure on financial results.
Fuel costs rise
Air cargo traffic among AACO members is expected to decline by 5.2% in 2026. By comparison, the group’s airlines reported around $11 billion in net profit and a net margin of 10.8% in 2025, according to data presented at the meeting.
Fuel is expected to account for 37.3% of Arab airlines’ operating costs in 2026. The share was 27.9% the previous year. For the global aviation industry, the projected share is 31.4%.
Globally, airlines’ net profit is expected to shrink to around $23 billion. This would be the lowest level in the past 12 years, excluding the period of the COVID-19 pandemic and its aftermath. Despite the decline, AACO expects the global sector to remain profitable, but with narrower margins.
Dispute with the EU over carbon rules
Plans to expand the European Emissions Trading System (ETS) were also discussed during the three-day assembly in Doha. AACO adopted a resolution opposing the inclusion of flights departing from the European Economic Area and landing in third countries within a radius of up to 5,000 kilometers from Frankfurt Airport, which is expected to take place by 2029.
AACO Secretary-General Abdul Wahab Teffaha told Euronews Travel that the measure raises the issue of the sovereignty of the countries through whose airspace the flights pass.
“This is extraterritoriality, an encroachment on the sovereignty of other states,” Teffaha said.He also warned of the possibility that Arab carriers could face double costs for reducing emissions. This is because the existing international CORSIA scheme already requires compensation for some emissions from international flights. According to AACO, additional ETS charges could result in double payment if the two systems do not mutually recognize each other’s levies.
Airlines maintain their growth plans
More than 200 executives and representatives of the aviation sector took part in the general assembly in Doha. The meeting’s chair and Chief Executive Officer of Qatar Airways Group, Hamad Al Khater, said that geopolitical developments continued to disrupt global connectivity.
“At a time when the sector is going through an exceptionally difficult period, regional cooperation has become our greatest strength,” Al Khater said.Despite the financial pressure, Europe remains a key market for Arab carriers. Qatar Airways plans to increase flights to European cities, including London and Frankfurt, while Emirates continues to invest in fleet renewal. AACO’s next annual assembly will be held in Cairo in November 2027.