Aviation industry convenes in Rio amid soaring fuel prices
GwynTopham
Global airline leaders gather in Rio for the Iata AGM despite jet fuel shortages from the Middle East conflict, with prices soaring to over $140/barrel. European carriers remain vulnerable but optimistic, while Gulf airlines face disruptions from the war.
World aviation leaders will converge in Rio de Janeiro, Brazil, this weekend for the Iata Annual General Meeting (Iata AGM), despite concerns over jet fuel shortages stemming from the escalating conflict involving the US, Israel, and Iran. The event is the first in-person gathering since the Covid-19 pandemic, signaling the industry's recovery.
While oil tankers remain stranded beyond the Strait of Hormuz, airlines are largely continuing operations, despite warnings that shortages could cause chaos for European travelers this summer. Jet fuel prices have surged from over $80 per barrel at the previous meeting in Delhi to more than $140 per barrel now.
According to aviation analytics firm Cirium, jet fuel accounted for over a quarter of global airline costs in 2025. Each dollar increase per barrel adds nearly $3 billion to annual fuel bills. About 6% of available seats have been cut from global flight schedules in the past month due to high costs and uncertain demand.
European airlines, considered the most vulnerable, have largely maintained full schedules ahead of the peak season. New fuel sources from the US and West Africa have been found as supply chains respond to high prices. EU Transport Commissioner Apostolos Tzitzikostas assured that there is currently no jet fuel shortage in Europe and no signs of imminent shortfalls.
Many major airlines have hedged most of their fuel supply, shielding them from price shocks. However, EasyJet CEO Kenton Jarvis said the carrier has paused hedging due to fuel price volatility, tied to decisions by US President Donald Trump. EasyJet's sharp stock decline attracted a takeover bid from US private equity firm Castlelake, potentially in partnership with another European airline.
The US-Israel-Iran conflict has hit Gulf airlines, which have large geographies, financial strength, and growth rates, with operations suspended when war broke out in late February, airports hit by drone attacks, and airspace closures. Emirates, Iata's host in Dubai in 2024, will have an unusually quiet presence in Rio.
Although the industry's environmental impact is less discussed this year, talks on sustainable aviation fuel (SAF) remain on the agenda. Iata Director General Willie Walsh, once a SAF advocate, now criticizes governments for imposing requirements while production lags. Walsh also announced he will step down from his role, which he has held since 2020, to lead Indian low-cost carrier IndiGo, which recently canceled its Delhi-Manchester route due to high fuel costs.
Iata has not confirmed whether a successor will be announced in Rio. Yet, after months of crisis, many airlines remain confident they will survive into next year.
