The impacts of the war in the Middle East added US$100 billion to airlines’ collective fuel bills this year and are expected to reduce the sector’s net profit to practically half that seen last year, from US$45 billion to around US$23 billion. At the same time, the sector’s net margin will plummet from 4.2% to 2.0%, in the same comparison.
The estimates were released this Sunday by Willie Walsh, director general of the International Air Transport Association (IATA), which is carrying out its .
Still, the executive said he does not consider the current situation as a crisis, since global demand for flights is still growing, albeit at a slower pace than expected before the war – 2.1% in the passenger business and 0.7% in cargo.
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Walsh highlighted that the height of the crisis in the Middle East for the sector was between March and April. According to data released at the end of May, in April, total demand, measured in kilometers paid per passenger, fell 3.4% compared to the same month in 2025. When excluding data from the Middle East, demand, however, increased 1.2%.
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He compared this period with that of the pandemic, as in March 2020, when the drop in global air transport was 99%.
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In an official note, he commented that the need for companies to increase ticket prices due to high fuel costs has initially been supported by customers, who are maintaining their travel plans. “Our research suggests that 86% of travelers expect fares to keep pace with oil prices. In line with this, 49% expect to spend more on travel this year than in the past. Another 43% plan to spend the same,” he said.
“This is a good sign for a strong summer peak season in the Northern Hemisphere. The big unknown is how long travelers and shippers will be able to tolerate the higher connectivity costs,” he warned.
Supply chain criticism
At the press conference during the IATA meeting, the director general made strong criticisms of the aerospace supply chain, which he said continues to fail to deliver aircraft and engines as promised.
“The aircraft backlog exceeds 18,000 units. And the average fleet age has reached a record 15.2 years. Additionally, the lack of more than 5,000 more fuel-efficient replacement aircraft that we were counting on means lost efficiency gains, not to mention higher leasing rates and increased maintenance costs. In total, supply chain failures will cost airlines at least $11 billion by 2025. Higher fuel prices today alone they will make it worse”, he listed.
He noted that while airlines have had to endure delays or deliveries below agreed quality, profits at most engine manufacturers have risen by double digits. “Manufacturers need to organize themselves. We have lost patience with them. They need to focus on customers, deliver engines that work. Before, when buying an aircraft, there was no worry about whether the engine would work or not. That was a given”, he commented.
My message to OEMs [sigla que em inglês significa fabricantes de equipamentos originais] It’s simple: stop exploiting the airlines and go back to making great engines that work and last. Allowing these failures to extend into the next decade is completely unacceptable to customers.”
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The executive also called for progress on other crucial issues for airlines, such as infrastructure, decarbonization policy and global standards.
Regarding security, he recalled the sector’s strong track record. “With one accident every 760,000 flights, flying is the safest way to travel. Nearly 5 billion people traveled safely on 39 million flights last year. There were, however, 51 accidents, 8 of which were fatal. Each of them was a tragedy.”
According to Walsh, history shows the way to make the industry even safer: global standards, supported by industry best practices and data-driven insights, reflected in consistent global regulation. “Weaknesses arise when global standards are not applied.”
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