5 takeaways from the largest annual gathering of airline CEOs

RIO DE JANEIRO — Hundreds of airline leaders gathered in Brazil this week at the International Air Transport Association’s annual meeting to discuss high fuel costs, sharply low profits, engine reliability issues and elusive emissions reduction targets, among other issues.

As the end of the meeting in Rio de Janeiro approached, news emerged that Iran and Israel had exchanged blows for the first time since the ceasefire came into effect in April. For airline executives who have faced ongoing turmoil since the first US and Israeli strikes on Iran on February 28, it seemed like just another blip in the chaos of 2026. The attitude of these airline leaders so far has been one of wait and see.

Here are some takeaways from the gathering:

Fuel costs have doubled in some places since the start of the Iran war, with the Strait of Hormuz, a major shipping lane, effectively closed most of the time.

The International Air Transport Association said airlines globally are absorbing a $100 billion increase in fuel costs this year, which, coupled with airspace closures due to Middle East attacks that have restricted travel, is likely to halve airline profits this year.

Willie Walsh, the organization’s outgoing director-general, said net profits will fall from $45 billion in 2025 to $23 billion in 2026, and net margins will fall from 4.2% last year to 2% this year.

As prices rise, airlines… We were not able to cover the entire fuel bill this year, so profits will be affected.

Customers continue to book, airline executives told CNBC.

Etihad Airways, based in Abu Dhabi, United Arab Emirates, initially felt the impact of turmoil in the Middle East this year as demand fell. But Antonualdo Neves, CEO of Etihad Aviation Group, said in an interview that the number of tickets is about the same as before the conflict, with a seasonal adjustment.

United Airlines CEO Scott Kirby, who runs the second-most profitable airline in the United States, said customers are continuing to book, even though prices are up about 20% and could rise further if fuel costs continue to rise.

Even the flexible bookings surprised him, he said. “I think the economy is stronger than people think,” he told CNBC in an interview. The United States is also more insulated from oil supply shocks than other regions because it produces so much more.

Summer bookings are strong, and airlines are also getting better at managing their capacity as fuel prices rise, cutting more unprofitable routes and reducing flights. The big question remains what will happen after the main summer and fall peak.

“This bodes well for a strong summer peak season in the north,” Walsh said of current trends. “The big unknown is how long passengers and shippers can sustain the high connectivity costs.”

The other question is where will fuel prices go from here?

“If prices remain the same, of course, the number of people who can afford to travel will decrease,” said Kamel Al-Awadhi, former CEO of Kuwait Airways and IATA vice president for Africa and the Middle East.

Aircraft manufacturers said they do not see a slowdown in orders due to rising fuel prices.

Airbus and Boeing continue to sell some of their most popular planes into the early next decade. Airlines generally plan fleet growth years in advance, and the bulk of the price of an aircraft is paid when the carrier takes delivery of it.

Neves, the president of Etihad Airways, told CNBC that he wants to buy more planes to supplement his current order book of dozens of planes, although he did not give a number, saying only that it was “more than 10.”

A spokesman for Brazilian planemaker Embraer said one risk is that customers do not exercise options to increase their existing orders, but the company does not see that yet.

Boeing is scheduled to announce May orders and deliveries on Tuesday morning.

Popular US airline Spirit Airlines succumbed in May to years of problems. It’s been dealing with an engine recall, a failed merger, and changing consumer tastes, all while managing a mountain of debt. But the jump in fuel prices was the final straw for the discounter, a U.S. bankruptcy court was told this spring.

IATA’s Walsh said at the conference that rising fuel costs could push other airlines into collapse as well.

This means that the most profitable, cash-rich airlines, which have done better in taking advantage of the K-shaped economy and the shift in demand toward higher-priced luxury travel, are better off than some of the more price-sensitive companies.

Airline CEOs are frustrated with engine makers who promised increased fuel efficiency in new-generation engines. The fuel savings are there, but disappointing reliability is taking them away, forcing airlines to maintain engines earlier than they thought, executives said.

Moreover, not enough of them are produced to satisfy transport companies Boeing Airbus increases production.

The new engines promising fuel savings of about 15% or more compared to previous models were “engineering marvels,” Alexis von Hoensbroech, CEO of Canada’s WestJet, told CNBC in an interview ahead of the International Air Transport Association (IATA) meeting.

“However, when you push the limits, sometimes that comes at the expense of reliability, and what we’re all seeing is that those engines are having to undergo unscheduled maintenance much more frequently than previous engine generations,” he said.

Companies like General Electric Aerospace Rolls-Royce, which received a windfall from increased demand, said it was busy with repairs and increasing repair capacity.