Aviation industry looks skywards as leaders fly in for Rio summit | Airline industry
As one potential participant noted, nothing says more about the jet fuel crisis than flying everyone to Rio de Janeiro. Aviation leaders will gather in Brazil this weekend for the Iata AGM, the annual global airline summit, and the industry is still largely staring resolutely at the skies.
Oil tankers may still be stuck behind the Strait of Hormuz as the conflict between the US, Israel and Iran continues, but for now airlines continue to defy dire warnings of impending shortages, raising fears of a summer of chaos for European holidaymakers.
If the General Assembly acts as a barometer of the boom and bust of the aviation industry, choosing to hold a meeting in Rio could be read as good times coming again, not least because the event was canceled in the Covid years and then held online.
At the last summit held in Delhi, Rio was declared as the host city. Prime Minister Narendra Modi personally spoke at the summit and emphasized the importance of aviation in India. At the time, global air traffic had recovered and jet fuel was just over $80 a barrel. It remains above $140 per barrel despite a decline from last month’s peak.
Jet fuel accounted for just over a quarter of global airlines’ costs in 2025, according to aviation analysts Cirium, with every dollar per barrel adding the best part of $3 billion to the annual fuel bill. About 6% of available seats worldwide were removed from airline schedules last month because costs were high and demand was uncertain.
European carriers, initially seen as among those most at risk, have largely continued to fly full schedules due to the lucrative busy season ahead. New sources of kerosene were found in the US and West Africa, and supply chains responded to premiums on jet fuel.
On Friday, EU transport commissioner Apostolos Tzitzikostas further eased concerns. “There is no shortage of jet fuel in Europe at the moment. We have no signs that we will experience fuel shortages in the coming period,” he told Reuters.
Many major airlines hedge much of their fuel supply, protecting them from price shock. But no analyst can confidently predict the cost to airlines and the amount customers will stomach in a protracted war. EasyJet’s CEO, Kenton Jarvis, recently admitted that the airline had suspended hedging due to volatility in fuel prices, saying it “goes up and down depending on what it is.” [Donald] Trump has breakfast.”
A current industry subtopic is who can eat easyJet for breakfast; The falling share price is prompting US private equity firm Castlelake to withdraw a takeover bid, potentially along with another European airline. EasyJet is not part of the Iata world; they are predominantly legacy airlines, national carriers, and long-haul operators whose fares may be more flexible than airlines built on the short-haul budget model. But others can be swallowed the same way, or worse.
The US-Israel-Iran war has affected some of the biggest global players: Gulf airlines, whose geography, deep pockets and rapid growth are reshaping how and where intercontinental travel takes place.
Industry observers are watching carefully to see how they will react, having seen operations come to a complete halt in the Middle East when war broke out in late February, with hub airports hit by drones and airspace closed. Emirates, the airline that will host Iata in Dubai in 2024 and one of the most powerful movers and shakers, will have an unusually quiet presence in Rio with the absence of its CEO.
Conversations about the industry’s environmental impact are likely to play an even smaller role in airlines’ thinking this year; But as always, those who think about the accounts have a concerted interest in reducing fuel costs per passenger. The last prolonged change in oil prices in the 2000s helped increase orders for new and more efficient aircraft. But flight numbers continue to grow faster than efficiency, and aviation’s carbon footprint is increasing relentlessly.
Sustainable aviation fuels [SAF] Despite the loss of faith of its advocates, it continues to remain on the agenda in conference halls. Iata chief executive Willie Walsh, who condoned Iata members joining the SAF as the only viable solution, has since lashed out at governments for imposing orders while production was disrupted.
The former British Airways boss also announced that he is stepping down from the Iata post he has held since 2020 and will take over as boss of India’s fast-growing budget carrier Indigo, which recently canceled its Delhi-Manchester direct route citing high fuel costs.
Iata has not yet confirmed whether a successor will be announced in Rio or if he will take office next year. But after months of the new crisis, most airlines still believe it will happen next year.
Flights to the Iata summit were provided by Iata and Latin airline
