New Delhi, May 31 - The global aviation industry, a vital artery of international connectivity and economic progress, is grappling with significant challenges as it navigates the complexities of trade wars and the pressing need to achieve net-zero emissions. The International Air Transport Association (IATA) will host its 81st Annual General Meeting (AGM) and World Air Transport Summit (WATS) in New Delhi, India, from June 1-3, 2025, hosted by IndiGo. This summit, a cornerstone event for the sector, will bring together airline leaders, policymakers, and industry stakeholders to strategize on maintaining resilience amid geopolitical tensions and accelerating the transition to sustainable operations, all while ensuring financial stability and operational efficiency.
.gif)
Trade wars, particularly between major economies like the United States and China, have introduced significant uncertainties for global airlines. Tariffs and trade restrictions disrupt supply chains, driving up costs for aircraft manufacturing, maintenance, and fuel. These economic frictions also impact passenger and cargo demand, as businesses and consumers adjust to higher prices and shifting trade patterns. For instance, reduced trade volumes between key markets can lead to lower cargo revenues, a critical income stream for many carriers. Additionally, protectionist policies may limit market access, complicating route planning and fleet utilization. At the New Delhi summit, airline executives are expected to explore strategies to mitigate these impacts, such as diversifying supply chains, optimizing route networks, and advocating for open skies agreements to preserve competitive access to global markets. Collaborative efforts with governments and trade organizations will also be a priority, as airlines seek to influence policies that promote free trade and minimize disruptions.
Simultaneously, the aviation industry faces intense pressure to achieve net-zero carbon emissions by 2050, a target set by IATA and aligned with global climate goals. The transition to sustainable aviation fuel (SAF), which can reduce emissions by up to 80% compared to conventional jet fuel, will be a central topic in New Delhi. However, SAF production remains limited, accounting for less than 1% of global aviation fuel supply, and its high cost challenges airlines with already slim profit margins. Discussions will likely focus on scaling up SAF production through investments in refining capacity and partnerships with energy companies. Innovations in aircraft technology, such as electric and hydrogen-powered planes, will also be explored, though their commercial viability is years away. The summit will emphasize the need for government incentives, such as tax credits and research funding, to bridge the gap between ambition and reality. Carbon offset programs and emissions trading schemes are expected to be debated as interim solutions, though their effectiveness and scalability remain under scrutiny. The interplay between trade wars and sustainability goals creates a complex landscape for airlines. For example, trade restrictions could limit access to critical materials for SAF production or advanced aircraft components, slowing the industry’s green transition. Conversely, failure to meet net-zero targets could lead to stricter regulations and higher compliance costs, further straining airline budgets. The New Delhi summit will serve as a critical forum for aligning economic and environmental priorities, with leaders exploring financing models, such as green bonds, to fund sustainability initiatives without compromising competitiveness.
Beyond these challenges, the summit will address operational resilience. Airlines are still recovering from the financial toll of the pandemic, with global industry debt estimated at over $600 billion. Rising fuel prices, labor shortages, and supply chain bottlenecks add further strain. Discussions in New Delhi will likely emphasize digital transformation, including the use of artificial intelligence for demand forecasting and operational efficiency, to cut costs and enhance customer experience. Cybersecurity, a growing concern as airlines rely more on digital platforms, will also be a key focus. With nearly 1,700 participants, including industry leaders, government officials, and media, the summit in New Delhi, featuring a keynote address by India’s Prime Minister Shri Narendra Modi, will highlight India’s rising prominence in global aviation. The event will foster collaboration among airlines, manufacturers, governments, and energy providers to chart a path toward a resilient and sustainable future for aviation, shaping the industry’s ability to adapt to a rapidly changing global landscape while continuing to connect people and economies worldwide.