{"id":1226,"date":"2026-06-06T20:07:33","date_gmt":"2026-06-06T20:07:33","guid":{"rendered":"https:\/\/reliablemovingcrews.com\/?p=1226"},"modified":"2026-06-06T20:07:33","modified_gmt":"2026-06-06T20:07:33","slug":"high-fuel-costs-to-trigger-airline-failures-and-consolidation-industry-chief-says","status":"publish","type":"post","link":"https:\/\/reliablemovingcrews.com\/?p=1226","title":{"rendered":"High fuel costs to trigger airline failures and consolidation, industry chief says"},"content":{"rendered":"<div><div><div><ul><li>Summary<\/li><li>Companies<\/li><\/ul><\/div><div><\/div><\/div><div>RIO DE JANEIRO, June 6 (Reuters) &#8211; Soaring jet fuel prices driven by conflict in the Middle East are likely to \u200bpush more airlines into bankruptcy and spur more sector consolidation this year and next, the head of the global airline body said \u200con Saturday.<\/div><div>Global airlines are grappling with higher fuel costs driven by the U.S. and Israel\u2019s war with Iran, which has choked jet fuel supplies and disrupted key air corridors, forcing costly detours.<\/div><div>Budget carriers have been among the hardest hit, lacking higher margin revenue streams such as premium cabins, high-paying travelers and credit card loyalty programs.<\/div><div>The strain is already showing: U.S. budget airline Spirit \u200bAirlines collapsed last month, and it will not be the last, said Willie Walsh, director general of the International Air Transport Association, the industry\u2019s \u200bmain trade body.<\/div><div>\u201cUnfortunately I think there will be some carriers that will find this high fuel price very difficult to \u2060cope with,&#8221; Walsh told Reuters at IATA&#8217;s annual summit in Rio de Janeiro, adding he expects some airlines to go out of business and others to be acquired \u200bby larger carriers.<\/div><div>Even so, the pressure does not spell the end of the low-cost airline model, which continues to thrive outside the United States, where the big \u200bthree carriers, United Airlines, Delta Air Lines and American Airlines, are squeezing out budget competitors, Walsh said.<\/div><div>\u201cI don&#8217;t see that the low-cost model is broken, in fact, quite the opposite,&#8221; he said, highlighting Ryanair&#8217;s strong performance in Europe as an example.<\/div><div>There is one blockbuster deal Walsh does not see happening: United Airlines CEO Scott Kirby\u2019s audacious proposal to buy arch rival American \u200bAirlines and create a U.S. aviation behemoth. The idea, which surfaced earlier this year, failed to get done despite Kirby raising it with President Donald Trump.<\/div><div>&#8220;I don&#8217;t \u200bthink that&#8217;s going to happen. I think the regulatory hurdles would be very significant. I don&#8217;t know whether that was a genuine effort to pursue consolidation or Scott just trying \u200cto stir \u2060up some media,&#8221; Walsh said.<\/div><h2>MIDDLE EAST AIRLINE WOES<\/h2><div>The Iran conflict has upended traffic flows through Middle Eastern hubs such as Dubai, Doha and Abu Dhabi, creating acute challenges for Gulf carriers including Emirates, Qatar Airways and Etihad.<\/div><div>Walsh said he didn&#8217;t think the conflict would do permanent damage to the Gulf as an aviation hub given its strategic geographic importance and the value of the popular Gulf carriers, which account for 14% of global capacity.<\/div><div>\u201cThat capacity cannot be replaced by airlines from other \u200bregions around the world,&#8221; Walsh said.<\/div><div>&#8220;Once things \u200bsettle down, I would expect the \u2060Gulf carriers to regain their important position in the market.&#8221;<\/div><div>Adding to the strain is the slow pace of aircraft deliveries from Boeing and Airbus, along with engine delays from GE Aerospace and Pratt &amp; Whitney, a unit of RTX, limiting airlines\u2019 ability \u200bto expand fleets and improve efficiency.<\/div><div>Walsh said the industry is increasingly frustrated by the delays, particularly as engine makers \u200bpost strong profits while \u2060airlines struggle. He estimates supply chain disruption cost airlines about $11 billion last year.<\/div><div>&#8220;We&#8217;re disappointed that they&#8217;re not moving faster. We&#8217;re disappointed that they&#8217;re not sharing the pain that the airline industry is sharing,&#8221; he said.<\/div><div>Aircraft and engine makers have said that much of the delays are out of their control, stemming from post\u2011pandemic supply chain disruptions and political \u2060trade disputes.<\/div><div>As \u200bairlines come under financial strain and climate policies lose momentum in the U.S. under Donald Trump, \u200bindustry leaders have grown more cautious about meeting a 2050 net zero emissions target.<\/div><div>Walsh said IATA is not ready to abandon the goal.<\/div><div>\u201cI certainly believe it&#8217;s more challenging to achieve net zero in \u200b2050 because we&#8217;ve not made the progress that we had expected to see on the development of sustainable fuels,&#8221; he said.<\/div><div><address><div><div><noscript>\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"120\" height=\"120\" alt=\"Joe Brock\" class=\"wp-image-1225\" src=\"https:\/\/reliablemovingcrews.com\/wp-content\/uploads\/2026\/06\/30e80da923675c49e3d9a7eb19ca7c69.avif\"\/><\/figure>\n<\/noscript><\/div><div>Joe Brock<\/div><\/div><div><ul><li><span><div><svg><title>Email<\/title><\/svg><\/div><\/span><\/li><li><span><div><svg><title>X<\/title><\/svg><\/div><\/span><\/li><li><span><div><svg><title>Linkedin<\/title><\/svg><\/div><\/span><\/li><\/ul><\/div><\/address><\/div><\/div><p>Read more <a href=\"https:\/\/reliablemovingcrews.com\/?p=1223\">Trump faces new Republican resistance in Congress as midterm pressures build<\/a><\/p><p>Read more <a href=\"https:\/\/reliablemovingcrews.com\/?p=1221\">France, allies eye national measures to pressure Israel over West Bank, diplomats say<\/a><\/p><p>Read more <a href=\"https:\/\/reliablemovingcrews.com\/?p=1219\">Airline chiefs grapple with fuel shock, fare test at Rio summit<\/a><\/p>","protected":false},"excerpt":{"rendered":"<p>Budget carriers have been among the hardest hit, lacking higher margin revenue streams.<\/p>\n","protected":false},"author":1,"featured_media":1224,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-1226","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - 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