Global airlines to address unpredictable trade war, daunting environmental targets at annual summit

Global airline bosses face trade war uncertainty, environmental targets, rising costs, and geopolitical challenges at annual summit in India.

An unpredictable trade war and daunting environmental targets are on the agenda for global airline bosses at an annual summit in India, as the industry addresses concerns that geopolitical uncertainty will dent strong travel demand and raise costs.

More people are flying than ever before after a full post-pandemic passenger market recovery, but airlines globally are facing rising cost pressures, extended plane delivery delays, supply chain bottlenecks and a setback in recently strong fares.

“On top of this, U.S. President Donald Trump’s evolving trade war has upended the aerospace industry’s decades-old tariff-free status and added a new layer of volatility,” analysts say.

While carriers in Europe and Asia report strong demand for flying, the U.S. sector has been hit by a recent slump in travel demand, with carriers struggling to forecast passenger behaviour and operational costs.

"You can't say that a fall-off in consumer confidence and higher inflation are not going to mean less money in the wallet for people to spend," Aengus Kelly, CEO of AerCap, the world's largest aircraft leasing company, told Reuters.

For now, airlines are filling planes but there are questions over the widely watched yield — or average fare per seat sold — they are able to charge as they tweak fares to fill cabins. Many, however, are also being cushioned from the worst effects of demand by a fall in fuel prices and a decline in the U.S. dollar’s value. “Those tailwinds have insulated airlines, to date, from the worst effects” of demand,” Mr. Kelly said.

The influential International Air Transport Association (IATA), which represents more than 300 airlines and more than 80% of global air traffic, will hold its annual three-day meeting from Sunday (June 1, 2025) in New Delhi.