Airline Profits Slashed to $23 Billion as Jet Fuel Spike Forces Cuts

Overview

• IATA cut its 2026 profit forecast to about US$23 billion on Sunday, saying a sharp rise in jet-fuel costs and Middle East airspace disruptions have eroded margins across the industry.
• Carriers are responding with higher ticket prices and capacity cuts, with major Brazilian airlines such as Azul and Latam reducing frequencies to protect cash and match demand to higher operating costs.
• Local schedules are already being affected: a comparison of ANAC data shows 494 flights were removed from Ceará’s July–September plans as airlines redraw networks.
• Brazilian policy moves and market steps have provided partial relief — the federal government extended a temporary PIS/Cofins exemption on QAV to July 31 and Petrobras cut QAV prices by about 14.2% on June 1 — but executives say the measures do not cover full exposure.
• The sector faces longer-term headwinds because many carriers hedged only about one-third of 2026 fuel use, aircraft delivery delays keep older, thirstier jets in service, and executives warn high jet-fuel prices could persist into 2027, risking further route losses and fare pressure.