The aviation industry is looking resolutely skyward as global leaders converge in Rio de Janeiro for the Iata AGM, the annual global airline summit, despite ongoing concerns over jet fuel prices and supply chain disruptions.

Jet Fuel Prices Remain High Despite Global Crises

Jet fuel costs. Currently above $140 a barrel. Continue to pose a major challenge for airlines — According to aviation analysts Cirium, fuel accounted for just over a quarter of global airlines’ costs in 2025. Every dollar increase in the price of a barrel adds nearly $3 billion to the annual fuel bill, a significant burden for carriers.

Despite fears of a summer of chaos for European holidaymakers, airlines have so far defied dire warnings of impending fuel shortages — the oil tankers remain stuck behind the strait of Hormuz amid the ongoing conflict between the US, Israel, and Iran. However, the EU’s transport commissioner, Apostolos Tzitzikostas, has downplayed concerns, stating there is no jet fuel shortage in Europe and no signs of one in the coming period.

Industry Resilience Amid Geopolitical Uncertainty

Many major carriers have hedged most of their fuel supply, protecting them from price shocks. However, analysts caution that no one can confidently forecast the costs to airlines or how much customers will tolerate in the event of a prolonged conflict. EasyJet’s chief executive. Kenton Jarvis. Recently admitted that the airline has suspended hedging due to the volatility of fuel prices, which he described as fluctuating “depending on what [Donald] Trump has for breakfast.”.

EasyJet, whose tumbling share price has drawn takeover interest from the US private equity firm Castlelake, is not part of the Iata world, but Iata primarily represents legacy airlines, national carriers, and long-haul operators, which may have more elastic pricing models than budget airlines. However, industry observers suggest that other airlines could also be vulnerable to takeovers.

The ongoing US-Israel-Iran war has impacted some of the largest global carriers, including Gulf airlines, which have reshaped intercontinental travel with their deep pockets and rapid growth. Operations in the Middle East were completely grounded in late February when war broke out, with hub airports hit by drones and airspace closures. Emirates, a key player in the industry, will be an unusually quiet presence in Rio, with its chief executive absent from the summit.

Environmental Concerns Take a Backseat

Environmental concerns have taken a backseat for many airlines, as the immediate focus remains on managing fuel costs. While sustainable aviation fuels (SAF) remain on the agenda, confidence in their viability has waned. Willie Walsh, the director general of Iata, has criticized governments for imposing mandates while production has failed to meet demand.

Walsh, who previously urged Iata members to adopt SAF as the only viable solution, is set to step down from his role. He is expected to take over as the boss of India’s fast-growing budget carrier Indigo, which recently canceled its direct Delhi-Manchester route due to high fuel costs. Iata has yet to confirm if a successor to Walsh will be announced in Rio or next year.

Despite months of fresh crises, many of Iata’s airlines remain optimistic about the future. Flights to the Iata summit were provided by Iata and Latam airline, highlighting the collaborative nature of the industry even in times of uncertainty.