Airlines are staring down a profit hit so sharp it could take out some players entirely. The industry's main trade group now expects global airline profits this year to be cut roughly in half, as a jet fuel crunch triggered by the US-Iran war sends costs soaring, Gizmodo reports. The International Air Transport Association (IATA) pegs 2026 net profit at $23 billion, down from a prior $41 billion forecast and last year's $45 billion. The key choke point: Iran's move to largely shut the Strait of Hormuz after US and Israeli strikes, triggering what the head of the International Energy Agency calls the worst energy crisis on record .

"War-related disruptions in the Middle East and rising fuel costs have shifted the outlook for airlines to the worse," says IATA head Willie Walsh. US airlines shelled out $5.06 billion for jet fuel in March alone, versus $3.88 billion a year earlier, with Walsh warning some carriers won't survive. Budget airline Spirit has already folded after 34 years, and other airlines are likely to go bankrupt or be acquired by larger players, Walsh tells Reuters. With a rejected bailout request from low-cost carriers, the response now is higher fares, trimmed routes, and thinner margins—net profit per passenger is expected to fall to about $4.50, even as tickets are already up more than 20% from last year.