Willie Walsh, head of the International Air Transport Association, said it could take months for jet fuel supplies to stabilize even if the Strait of Hormuz remains open, due to damage and disruption to refining capacity across the Middle East.

Airlines are facing what executives describe as their most severe operational strain in years, as Iran’s earlier closure of the key shipping route choked global jet fuel supply, pushing prices sharply higher.

Although oil prices fell below $100 a barrel following the ceasefire announcement, jet fuel costs remain elevated.Delta Air Lines said it expects lower-than-forecast second-quarter profit and plans to reduce capacity across its network to offset an estimated $2 billion increase in fuel expenses.

The carrier projects jet fuel prices at around $4.30 per gallon for the June quarter, significantly higher than a year earlier.Fuel typically accounts for about 27% of airline operating costs, making the recent surge particularly burdensome.

Industry data indicates jet fuel prices have more than doubled since the onset of the Iran conflict, outpacing increases in crude oil.Airlines globally have responded by raising fares, cutting flights, carrying additional fuel from origin airports and adding refueling stops to manage supply uncertainty.

Walsh said that while crude prices may ease, jet fuel is likely to remain relatively expensive in the near term due to refinery constraints. “Even if it reopens and stays open, it will take months to restore supply to required levels,” he said.The disruption is also affecting adjacent sectors.

TUI said it is assessing options for two cruise ships stranded in Abu Dhabi and Doha since the conflict began, noting it could take weeks to resume operations.Analysts said the ceasefire has supported airline stocks, with some describing the situation as a potential buying opportunity.

However, broader recovery in travel demand may lag, with economists pointing to a prolonged impact on consumer confidence.

According to Oxford Economics, it could take several months for traveler sentiment to normalize, even under a stable ceasefire scenario, as safety perceptions recover gradually.

The Middle East tourism sector, valued at roughly $367 billion, is also expected to face a delayed rebound, reflecting the wider economic fallout from the conflict and supply chain disruptions.

Willie Walsh, director general of the International Air Transport Association, told reporters in Singapore that while crude prices had fallen below $100 per barrel following a U.S.-Iran ceasefire announcement, jet fuel costs were likely to remain elevated due to constraints on refining output.

“If it were to reopen and remain open, I think it will still take a period of months to get back to where supply needs to be given the disruption to the refining capacity in the Middle East,” Walsh said, adding that the region is critical to global supply of refined products beyond aviation fuel.

The Strait of Hormuz, which carries about a fifth of the world’s oil trade, has been heavily disrupted during the recent conflict, squeezing fuel availability and driving up costs across the aviation sector.

Airlines in Asia have responded by cutting flights, carrying additional fuel from origin airports and adding refueling stops, measures that have increased operational costs for carriers already dealing with a sharp rise in jet fuel prices.

The impact has been most acute in import-dependent markets such as Vietnam, Myanmar and Pakistan, where supply constraints have tightened further after China and Thailand halted jet fuel exports and South Korea capped shipments at previous levels.

Walsh said a resumption of crude flows could encourage exporters such as China and South Korea to restart shipments of refined products, easing pressure on the market over time.

However, he noted that higher refinery margins, known as crack spreads, would be needed to incentivize increased jet fuel production.

“There is capacity available once we get the crude oil flowing, but it’ll take a little bit of time,” Walsh said.

Global airlines champion sustainability but urge fair pricing, as IATA highlights the need for cooperation — not competition — in fueling aviation’s cleaner future.

The International Air Transport Association (IATA) is calling for balanced, transparent pricing in the aviation industry’s green transition, saying airlines are eager to embrace sustainability — but must not be penalized for doing so.

As Europe’s new green jet fuel mandates come into effect, IATA is encouraging regulators, energy suppliers, and airlines to work hand in hand to make cleaner skies achievable for all.

The European Union’s sustainable aviation fuel (SAF) mandate, which took effect this year, requires airlines to blend at least 2% of their fuel with greener alternatives, with that target set to rise to 6% by 2030.

The goal is to reduce carbon emissions from the aviation sector — one of the hardest industries to decarbonize — by gradually replacing fossil-based jet fuel with sustainable sources such as biofuels or synthetic alternatives.

However, as the aviation industry works to meet these ambitious environmental targets, IATA has raised concerns over rising costs and market practices that could threaten the long-term affordability and scalability of SAF.

According to IATA Director General Willie Walsh, some fuel suppliers have taken advantage of the new mandates to increase prices through additional “compliance surcharges,” almost doubling the cost compared to standard market rates. “We fully support the environmental goals behind these policies,” Walsh emphasized in an interview with Reuters, “but fair pricing is essential. We cannot allow sustainability to become an excuse for overcharging.”

While Walsh did not single out any specific suppliers or airlines affected, he urged European regulators to examine the issue and ensure that cost transparency and competitive fairness remain central to the green transition. “Our industry is ready to invest and innovate,” he said. “But we need partnership, not penalties, to get there.”

Airlines Leading the Green Revolution

The aviation industry has been one of the most proactive in embracing global sustainability goals. Major airlines have announced long-term commitments to achieve net-zero emissions by 2050, with SAF seen as a cornerstone of that mission.

Compared to traditional jet fuel, SAF can reduce lifecycle emissions by up to 80%, offering a powerful pathway toward cleaner air travel.

Still, the challenge lies in scaling production. At present, SAF costs roughly three to five times more than regular jet fuel, mainly due to limited supply and high production costs. Energy companies argue that they need greater investment and stable demand to expand SAF output, while airlines face mounting financial pressure as costs rise.

“Everyone agrees on the importance of sustainable fuel,” said an aviation analyst based in Paris. “The real question is how to make it affordable, accessible, and fairly distributed across the industry.”

The Need for Shared Responsibility

Walsh’s comments come at a time when cooperation between governments, fuel suppliers, and airlines has never been more crucial. IATA has urged policymakers to incentivize innovation and support large-scale SAF production through subsidies, tax relief, and infrastructure investment — much like the renewable energy sector benefited from during its early growth years.

The association’s message is clear: sustainability should be a collective journey, not a competitive battlefield. “We’re not against mandates,” Walsh noted, “but they should drive progress, not profit-taking at the expense of airlines and passengers.”

Several oil majors, including ExxonMobil, TotalEnergies, and Shell, have already announced SAF expansion projects, though some have recently scaled back plans due to fluctuating demand and high input costs. Industry experts believe stronger public-private partnerships could bridge this gap, ensuring consistent fuel supply and fair pricing mechanisms.

Aviation’s Vision for 2025 and Beyond

Despite cost challenges, the global aviation sector remains optimistic. Airlines continue to invest in cleaner technologies — from next-generation aircraft to hydrogen-based propulsion research — alongside SAF development.

IATA’s latest report also highlights that the industry is expected to spend nearly $11 billion in 2025 on addressing congestion and supply chain challenges, reflecting its determination to maintain operational stability while advancing sustainability goals.

As Walsh aptly put it, “The skies belong to all of us — and so does the responsibility to protect them. We must build a system that rewards commitment, innovation, and environmental progress, not exploitation.”

With global travel rebounding and climate awareness at an all-time high, the coming decade could define the future of flight. For IATA and its member airlines, the mission remains clear: make aviation greener, fairer, and more resilient — together.