Global airlines face severe cost crisis - Middle East crisis has made fuel more expensive
Global airlines are facing a severe cost crisis, as escalating geopolitical tensions and conflicts in the Middle East have continued to push jet fuel prices higher and higher.
At the 82nd Annual General Meeting of the International Air Transport Association (IATA) and the World Air Transport Summit held in the Brazilian city of Rio de Janeiro from 6 to 8 June, carriers warned that the war in the Middle East has disrupted key energy transport routes, causing a significant increase in aviation fuel prices.
IATA, which represents more than 370 airlines accounting for approximately 85 percent of global air traffic, forecast a total net profit of $23 billion for global airlines in 2026, which is roughly half of the $41 billion previously forecast.
Rising fuel costs and operational disruptions following the outbreak of war in Iran have changed the outlook, IATA said. Financial stress is already forcing carriers to change operating strategies.
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 lifespan of older, less efficient aircraft. This means that keeping older fleets in the air exacerbates the cost crisis, as these models burn more fuel and require much higher maintenance costs.
While the aviation sector has faced increasing pressure to switch to non-petroleum-based fuels to meet emissions targets, the summit highlighted that sustainable aviation fuel (SAF) remains too scarce and expensive to provide 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 expected to be approximately 2.4 million tonnes, meeting only 0.8 percent of global aviation fuel demand, IATA estimated.
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