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At the annual summit, global airlines will address net-zero uncertainty and trade war at the summit.

The industry is concerned that the geopolitical uncertainties will reduce travel demand and increase costs. An unpredictable trade conflict and ambitious environmental targets are both on the agenda at the annual airline summit in India.

After a full recovery of the passenger market following the pandemic, more people are now flying. However, airlines are faced with rising costs, prolonged plane delivery delays and supply chain bottlenecks.

Analysts say that the evolving U.S. trade war of President Donald Trump has overturned the aerospace industry’s decades-old status of tariff-free and created a new level of volatility.

Carriers in Europe and Asia are reporting strong demand for flights, but the U.S. industry has recently been hit with a slump in travel demand. Carriers have struggled to predict passenger behavior and operational costs.

Aengus Kell, CEO of AerCap - the world's biggest aircraft leasing company - said: "You can't pretend that falling consumer confidence and rising inflation won't mean less money for people to spend."

As of now, airlines have filled planes. However, there are concerns about the yield (or average price per seat) they can charge when they adjust fares in order to fill cabins.

The fall in fuel costs and the value of the U.S. Dollar also cushion many from the worst effects.

Kelly stated that "those tailwinds" have protected airlines from the worst impacts of demand to date.

New Delhi will host the annual three-day conference of the influential International Air Transport Association, which represents over 300 airlines and more than 80% global air traffic.

Air travel in Asia will outpace Europe and North America over the next few decades, according to the summit hosted by India's largest airline IndiGo.

India's recent hostilities against Pakistan, which are forcing Indian airlines to make large and expensive detours through Pakistani airspace highlight the increasing burden conflict zones place on airline operations.

IATA stated in February that aviation safety is a major concern due to accidents and incidents involving conflict zones. This requires urgent global coordination.

Aviation safety is also a focus, following a series of accidents that occurred in Kazakhstan, South Korea, and North America in the last six months. There are also growing concerns in the United States about the air traffic control system.

NET-ZERO DOUBTS

IATA warns that airlines may struggle to achieve their sustainability goals and that the funding for new technologies and sustainable aviation fuel is unclear.

In 2021, the aviation industry agreed to a target of net-zero emission in 2050. This was based on a gradual shift to SAF fuel made from waste oils and biomass. SAF is more expensive than conventional jetfuel.

Willie Walsh, Director General of IATA, has said in recent weeks that the industry needs to reevaluate its commitment. However, no changes are expected to be made to the industry's goals at the New Delhi conference.

The airlines are in conflict with the energy companies about SAF shortages, and also blame Airbus and Boeing for delays in delivering fuel-efficient aircraft.

Walsh's often scathing address to airline chiefs on Monday is likely to bring some criticism to the government.

"The demand for SAF remains outstripped by supply, and the costs remain prohibitively expensive." Subhas Menon is the director general of Association of Asia Pacific Airlines. He said that regulatory frameworks for encouraging SAF production were still inconsistent or inadequate. Reporting by Lisa Barrington, Tim Hepher and Abhijith Ganapavaram from New Delhi. Editing by Jamie Freed.

(source: Reuters)