Global airline chiefs to confront Iran war fuel shock at industry summit
āĻĒā§āĻ°āĻāĻžāĻļ: āĻŦā§āĻšāĻ¸ā§āĻĒāĻ¤āĻŋāĻŦāĻžāĻ° āĨ¤ āĻā§āĻ¨ ā§Ļā§Ē, ā§¨ā§Ļā§¨ā§Ŧ
Global airline bosses gathering in Rio de Janeiro this weekend will be searching for answers to the industry's biggest crisis since the pandemic, with the Iran war driving up jet fuel costs, forcing flight âdetours and testing carriers' ability to raise fares.
The June 6-8 annual meeting of the International Air Transport Association (IATA) is the industry's biggest summit, bringing together hundreds of âtop executives from airlines, manufacturers, suppliers and financiers.
IATA represents more than 370 airlines accounting for some 85% of global air traffic, giving it a central role in a sector where profits were expected to reach a record $41 billion this year before the Iran war began.
Industry executives and analysts expect a downgrade to that forecast at the meeting, where discussions are expected to center on surging fuel prices and supply fears, disruptions to Middle Eastern airspace, deepening aircraft delivery delays âand whether airlines are falling further behind on climate goals.
Airlines around the world have already been responding by raising fares, cutting unprofitable routes and conserving cash until pressures ease, raising more âquestions about whether they can meet IATA's goal of net-zero emissions by 2050 given the high cost and limited supply of sustainable aviation fuel.
Moody's Ratings â last week cut its global airline sector outlook to negative from stable, saying fuel costs tied to the Iran war and disruption around the Strait of Hormuz would "materially reduce" operating profit this âyear. It said profits could fall by more than 35% in 2026 before recovering next year.
IATA data showed global passenger traffic contracted in April for the first time since the post-pandemic recovery, led by âa sharp drop at Middle Eastern carriers.
Air India's outgoing CEO Campbell Wilson said higher fuel prices and airspace closures were making some routes harder to justify.
"When you take on all those competitive dynamics, the added cost of this extra flying, the added cost to fuel, it just makes some routes uneconomic," he said.