New Delhi: The International Air Transport Association (IATA) on Wednesday warned of possible jet fuel shortages in parts of Asia and Europe in the coming months, as supply disruptions linked to the West Asia conflict tighten availability and drive up costs. Jet fuel prices, which form a significant portion of airline operating expenses, have surged amid geopolitical uncertainty and supply constraints.

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"Everybody's watching what's happening with jet fuel -- both supply and pricing. On the supply side, over the next few months, we could see shortages in parts of the world with high dependence on supplies from the Gulf, especially Asia and Europe," said Willie Walsh, Director General of IATA.

Rising fuel costs increasingly reflected in ticket prices

Walsh said the sharp increase in jet fuel prices is now beginning to feed into ticket pricing, although demand trends have not yet been affected. "While this has not impacted March traffic or forward bookings to date, it remains to be seen at what point high prices could start to shift passenger behaviour. So far, the summer is shaping up to be a normally busy time for travel. That’s positive news, but airline resilience is being tested and stabilising the supply and price of fuel is crucial," he said.

Regulators urged to allow flexibility amid operational constraints

He also said regulators should be prepared to provide operational flexibility to airlines, particularly on airport slots, given constraints such as restricted airspace capacity and the possibility of fuel rationing. His remarks were part of IATA's passenger traffic report for March.

Indian airlines flag financial stress, seek support

Separately, on April 26, the Federation of Indian Airlines (FIA), representing carriers such as IndiGo, Air India and SpiceJet, told the government that the domestic aviation sector is under severe financial strain and at risk of "stopping operations".

The industry body sought revision in Aviation Turbine Fuel pricing and financial support measures.

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Global passenger demand rises 2.1%, capacity declines 1.7%

According to IATA, global passenger demand, measured in Revenue Passenger Kilometers, increased 2.1 percent in March compared with the same period last year.

"Total capacity, measured in Available Seat Kilometres (ASK), decreased 1.7 per cent year-on-year. The load factor was 83.6 per cent (+3.1 ppt compared to March 2025)," the association said.

IATA represents more than 360 airlines globally, including Indian carriers such as IndiGo, Air India, Air India Express and SpiceJet.