The global airline industry will see its profits halve this year amid rising jet fuel prices triggered by the U.S.-Iran conflict, the director general of an airline association said Sunday in Brazil.
Willie Walsh, director general of the International Air Transport Association (IATA), recounted the industry’s challenges since the pandemic in his report at the group’s annual meeting in Rio de Janeiro.
“No sooner did we put COVID behind us than we faced aerospace supply chain failures, war in Ukraine, geopolitical tensions, and tectonic shifts in trade policies,” he said.
“And when war broke out in the Middle East in March, oil prices jumped, and jet fuel prices skyrocketed. As a result, we expect average jet fuel prices to be 70 percent higher year-on-year. That will add $100 billion to our collective fuel bill this year.”
Walsh said these circumstances are expected to cut profits by half from 2025, with net income falling from $45 billion to $23 billion this year, along with a significant dip in net margins.
According to data from IATA, the global jet fuel price was around the $100 per barrel level prior to the U.S.-Iran conflict. After the war broke out, prices doubled to roughly $200 per barrel in March and April.
U.S. airlines’ aviation fuel costs were up by 26.2 percent in April compared with March, the Department of Transportation’s Bureau of Transportation Statistics said in a June 5 statement.
April fuel costs were up 78 percent from a year ago, with U.S. airlines spending a total of $6.47 billion on fuel for their scheduled service in April, up from $3.63 billion in 2025.
According to IATA, jet fuel accounts for up to 30 percent of an airline’s operating costs.
In his speech, Walsh said IATA polls suggest that 49 percent of travelers expect to spend more on travel in 2026 than in 2025.
While this bodes well for the summer travel season in the north, it is unknown how long travelers and shippers will be able to tolerate higher costs, Walsh said.
And supply chain issues add more burden on airlines.
“Airlines face higher fuel costs with fleets that are less efficient than planned. Why? Because the aerospace supply chain continues its failure to deliver aircraft and engines as promised,” Walsh said. “In total, supply chain failures cost airlines at least $11 billion in 2025. Today’s higher fuel prices will only make that worse.”
Airline Disruptions
Multiple U.S. airlines have been affected by the rising fuel prices.
Last week, American Airlines said it was temporarily suspending some of its routes this summer. The company said it had adjusted service for “select routes” in August and September—and that impacted travelers would be offered alternative arrangements or refunds.
The Fort Worth, Texas-based airline cited elevated fuel costs and maintained that these changes were in line with wider industry trends. American added that it was not cutting any of its routes indefinitely.
In May, Spirit Airlines announced it was pausing all operations following months of restructuring efforts. The company had initially expected to emerge from bankruptcy by spring, but rising financial strain and the uptick in fuel costs prevented that.
Airlines for America (A4A), a trade association of U.S. airlines, said in a May 2 statement that its member carriers are taking steps to minimize the impact of high fuel costs.
This includes reducing flight frequencies on some routes, ending less profitable routes, grounding certain aircraft, raising fares where required, increasing fees for checked bags, and retiring older, less fuel-efficient planes.
In Europe, the Lufthansa Group announced in April that it would cut 20,000 flights through October, resulting in more than 40,000 metric tons of jet fuel savings.
European Union transport commissioner Apostolos Tzitzikostas said last week that there were no signs of jet fuel shortages in the region over the coming months, even though high prices were making airlines cut uneconomic routes.
The Associated Press contributed to this report.
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