The global airline industry is entering a new growth phase, with the UAE, India and Saudi Arabia emerging as its main drivers as profits recover, travel demand surges and aircraft shortages tighten supply.
Airlines are expected to earn about $41 billion in 2026, marking a fourth straight year of profitability and signalling a decisive break from the pandemic-era downturn, according to forecasts from aviation lessor Avolon.
The sector has already recovered more than 80 per cent of the $182 billion lost during Covid-19. Now the focus has shifted to expansion. India, the UAE and Saudi Arabia together hold aircraft orders exceeding 3,000 planes — more than double their combined active fleets — with roughly 900 deliveries scheduled over the next three years. The scale of those orders reflects both booming passenger demand and long-term national strategies built around tourism, trade and global connectivity.
India’s aviation market is among the fastest growing worldwide. The country is now the world’s third-largest domestic aviation market, carrying more than 150 million passengers annually, according to the International Air Transport Association. Indian carriers have placed record aircraft orders topping 1,300 jets, led by IndiGo and Air India, as the government expands airport capacity to more than 220 facilities by the end of the decade. Iata projects passenger traffic growth of more than 6 per cent annually through 2030, well above the global average.
The UAE remains the region’s dominant international hub. Dubai International Airport handled close to 90 million passengers in 2024, retaining its position as the world’s busiest airport for international travel. Abu Dhabi has doubled terminal capacity at Zayed International Airport, while Emirates airline and Etihad airways together operate one of the world’s largest widebody fleets, with more than 500 aircraft on order. The country’s hub-and-spoke model continues to attract long-haul traffic linking Asia, Europe and Africa.
Saudi Arabia is pursuing one of the world’s most aggressive aviation expansions under Vision 2030. The Kingdom aims to triple annual passenger numbers to more than 330 million by the end of the decade. New national carrier Riyadh Air, large fleet expansion plans at Saudia and the development of King Salman International Airport — designed to handle up to 120 million passengers annually — are reshaping regional traffic flows and intensifying competition among Gulf hubs.
Lower fuel prices are strengthening airline balance sheets and supporting expansion plans. Avolon estimates fuel costs fell by about $8 billion in 2025, accounting for roughly one-fifth of industry profits. With energy markets expected to remain relatively stable this year, airlines are gaining room to invest in fleet renewal even as labour and maintenance costs rise.
The main constraint is supply. Order backlogs at Airbus and Boeing now extend beyond 11 years, limiting near-term delivery capacity and raising the strategic value of aircraft leasing. “The industry is effectively sold out for the rest of the decade in key aircraft categories,” said Rob Morris, global head of consultancy Cirium Ascend. “That’s pushing airlines to compete for delivery slots and driving lease rates higher.”
Global aircraft deliveries are expected to reach about $120 billion in value in 2026, up 20 per cent from last year, with lessors financing nearly half of those purchases. Widebody aircraft are in particularly short supply as international routes drive most of the world’s capacity growth. The Airbus A330neo, currently the only new passenger widebody widely available before 2032, is seeing lease rates rise sharply as carriers rush to secure long-haul capacity.
Despite geopolitical risks and supply chain pressures, the broader economic backdrop remains supportive. About 90 of the world’s largest economies are forecast to grow by more than 1 per cent in 2026, providing a stable foundation for global travel demand.
“India, the UAE and Saudi Arabia are emerging as the next engines of growth with order backlogs that are double their current in-service fleets,” said Jim Morrison, chief risk officer at Avolon. “With around $120 billion of aircraft financing required this year, lessors will play a central role in enabling fleet renewal and the transition to more fuel-efficient aircraft.”
As traditional Western markets mature, industry executives increasingly see the next decade of aviation growth being shaped by the Gulf and South Asia. With record orders, expanding airports and government-backed aviation strategies, the UAE, India and Saudi Arabia are positioning themselves at the centre of the industry’s next expansion cycle.
- India
- Saudi Arabia
