High fuel costs to trigger airline failures and consolidation, industry chief says

The global airline industry faces a challenging future, with escalating jet fuel prices poised to trigger a wave of airline failures and consolidation. The head of the International Air Transport Association (IATA) issued a stark warning on Saturday, predicting a rise in bankruptcies within the next one to two years.

These soaring fuel costs are directly linked to the ongoing conflicts in the Middle East, particularly involving the U.S. and Iran. The increased price of fuel represents a significant operational burden for airlines, many of which are still recovering from the economic impacts of the COVID-19 pandemic.

Industry leaders are grappling with the financial strain, and the expectation is that weaker carriers will be unable to sustain operations. This anticipated consolidation could reshape the competitive landscape of the airline sector as carriers merge or cease operations under the mounting financial pressure.

“

Soaring jet fuel prices driven by conflict in the Middle East are likely ​to push more airlines into bankruptcy and spur more sector consolidation this year and next, the head of the global airline body said on Saturday.