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“Our industry can be profitable in high-price environment”, IATA head says
June 18th 2026
The current environment of the high fuel prices, being the result of the conflict in the Middle East, is a challenge, but not a crisis, Willie Walsh, the International Air Transport Association (IATA) director general told Orient Aviation Daily Digest during the meeting with media on the sidelines of the IATA Annual General Meeting (AGM) & World Air Transport Summit (WATS) in Rio de Janeiro, Brazil, hosted by LATAM Airlines Group. Read More » “I do not call it a crisis at the moment. Everything is relative, and when you have come through COVID and even some previous crises that I have experienced. In an environment where you expect to be profitable at the industry level, and for growth to be at 3.5% - that is not a crisis. I think it certainly is a cost challenge. Some of the early concerns were not just the impact of the higher cost, but concerns about supply, such as when we are going to run out of jet fuel. I think those concerns have abated significantly, because what we have seen is where refining capacity is available and in place - in places like Africa, some parts of Europe, and in the UK - they have increased the volume of jet fuel that they are producing,” Walsh said.
He gave the example of the UK, as one of the economies that successfully increased its jet fuel supply: “I was monitoring the UK very closely, because it was one country I was the most concerned about. If you look at 2025, one-third of their jet fuel was imported from Kuwait, and Kuwait has not exported anything since this war started, and then a further 13-14% came from India. And Europe and the UK have sanctioned Indian refineries over the use of Russian crude. So, in effect, the UK had 50% of its jet supply cut off. Now, two things have happened. They removed the sanctions on Indian jet production, they have increased imports from the US, increased imports from Africa, and they have increased the production in the refineries that operate in the UK.”
“Early on, people were worried about price and supply. The supply concerns, if they have not completely gone, have abated significantly. The issue now is just how to manage our way through this spike in the oil price,” he added.
The IATA director general believes, that with the supply concerns abated, the airlines can adjust their operations to the higher price of fuel. “What I have always said is that our industry can be profitable in a high-price environment; it just takes time to adjust. We forecast jet fuel to be $152 per barrel. I have pointed this out before - in 2011, 2012, 2013, jet fuel averaged about $135 per barrel, not far off from what we are forecasting, and the industry was profitable all those years. What challenges the industry is the rapid increase in the price of oil. And this is why some airlines hedge, just give them some time to adjust. Therefore, as I said, it is very challenging. But when you have the demand pretty robust, the outlook for the next year is not too bad in terms of economic growth, still good demand for cargo. It is just a short-term cost challenge that we have to adjust to,” he said.
Walsh cautioned, that for some airlines, the current market conditions may be problematic. “But then, there will be airlines that had weak balance sheets coming into 2026 and won’t have hedged. Those airlines have been fully exposed to the increase in the oil price. It is going to be a real struggle for them. So I do expect there to be failures. But I do not expect any major failures, but I will not be surprised, like Spirit in the US. It had no hedging in place, it had just come out of chapter 11, its balance sheet was OK, but they did not have much cash, and therefore limited liquidity, and they faced this spike in oil price. So there are other airlines in this environment in other parts of the world. For them, it is a crisis, but for the industry, it is not a crisis,” he concluded.
