(AURN News) — Airlines are bracing for major financial pressure as the war between the United States, Israel and Iran continues.
Willie Walsh, director general of the International Air Transport Association, released a new report outlining the state of the global air transport industry and warned that rising fuel costs are already taking a toll.
“When war broke out in the Middle East in March, oil prices jumped and jet fuel prices skyrocketed,” Walsh said.
“As a result, we expect average jet fuel prices to be 70% higher year-on-year. That will add $100 billion to our collective fuel bill this year,” Walsh said.
Walsh said the ongoing conflict, particularly concerns surrounding the Strait of Hormuz, is expected to have a major impact on airline profitability.
“We expect profitability to halve from 2025. Net profits will fall from $45 billion to $23 billion in 2026, and net margins from 4.2% to 2.0%,” he said.
The report also found that travelers expect higher costs ahead.
According to polling cited by Walsh, passengers expect airfares to follow oil prices, with 49% saying they expect to pay more for air travel.
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