GLOBAL airlines are facing a severe cost crisis as escalating geopolitical tensions and conflicts in the Middle East have kept pushing jet fuel prices higher and higher, airline executives said at an annual industry summit.
At the 82nd International Air Transport Association (IATA) Annual General Meeting and the World Air Transport Summit held in Brazilian city Rio de Janeiro from June 6-8, carriers have warned that the war in the Middle East has disrupted major energy shipping routes, triggering a sharp spike in aviation fuel prices.
IATA, which represents more than 370 airlines comprising roughly 85 percent of global air traffic, predicted a total net profit of 23 billion U.S. dollars for global airlines in 2026, which is roughly half of the previously projected 41 billion dollars.
The surge in fuel costs and operational disruptions following the outbreak of the U.S.-Israeli war against Iran have changed the outlook, IATA said.
The financial strain is already forcing carriers to alter operational strategies.
Brazilian airline Azul Airlines said it is planning to cut more flights to cope with the fuel crisis, while Air New Zealand said that it plans to aggressively raise ticket prices to offset rising overheads.
Compounding the fuel crisis is a shortage of new commercial aircraft.
Production delays at major manufacturing giants Boeing and Airbus have stalled new deliveries, leaving operators unable to refresh their fleets.
To maintain capacity, many airlines have been forced to extend the service life of older, less efficient aircraft. This means that keeping aging fleets in the air exacerbates the cost crisis, as these models burn more fuel and require significantly higher maintenance expenditure.
While the aviation sector has faced increasing pressure to transition to non-petroleum-based fuels to meet emission targets, the summit highlighted that sustainable aviation fuel (SAF) remains too scarce and expensive to offer immediate relief.
Unlike traditional jet fuel refined from crude oil, sustainable aviation fuel is produced from agricultural residues, food waste, and used cooking oils. Its annual production is projected at approximately 2.4 million tons, satisfying just 0.8 percent of global aviation fuel demand, IATA estimated.
Despite the dramatic price spikes caused by the war in the Middle East, the immediate crisis has failed to accelerate a meaningful breakthrough in expanding sustainable aviation fuel supply chains.
