Willie Walsh, Director General of the International Air Transport Association (IATA), delivered a speech at the 82nd Annual General Meeting (AGM), which is being held in Rio de Janeiro, Brazil.
In his speech, Walsh identified the 70% surge in jet fuel prices caused by the conflict in the Middle East as the greatest challenge, and indicated that net profit in 2026 is expected to be halved from USD 45 billion in the previous year to USD 23 billion. He strongly criticized aircraft and engine manufacturers, pointing out that aircraft backlogs have exceeded 18,000 units, the average fleet age has reached a record high of 15.2 years, and that failures in the supply chain imposed at least USD 11 billion in costs on airlines in 2025.
Regarding the Brazilian government’s policy of considering the application of a 26.5% value-added tax (VAT) on air tickets to Brazil, he voiced strong opposition, stating that this would add USD 195 to the average international fare of USD 740 and could result in the loss of up to 3.6 million international trips. Concerning the EU261 passenger rights regulation, he asserted that it imposes an annual cost of EUR 8 billion on airlines without contributing to improvements in punctuality, condemned it as “a textbook example of bad regulation,” and argued that it should be scrapped and redesigned.
While welcoming long-term strategic visions that can meet demand—such as the opening of new airports in Ho Chi Minh City and Sydney and the construction of Terminal 5 in Singapore—he criticized what he described as Manila’s exorbitant royalties, Lisbon’s poor concessions, Lima’s inappropriate transfer charges, and the ad-hoc refurbishment works in Mexico City.
On the plan for a third runway at London Heathrow Airport, he cited the airport management’s statement that the introduction of genuine competition was a “red line,” and called for a break from the current weak economic regulation model and the introduction of effective regulation. While expressing his expectation that it could become “an airport that delivers truly endless benefits,” he voiced concern that “the sole motivation of Heathrow’s shareholders and management is the pursuit of their own profit.”
Regarding sustainable aviation fuel (SAF), he pointed out the contradiction that, while production in 2026 will remain at 2.4 million tonnes—only 0.8% of total demand—Europe’s SAF mandates are driving up costs without increasing supply. On CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation), he stressed the urgency of course correction to achieve the 2050 net-zero target, noting that against the required 170 to 236 million Emissions Units (EEUs), only 38 million have been secured so far.
Walsh noted that he will step down as Director General in a few weeks and assume the role of Chief Executive Officer (CEO) of IndiGo. He concluded his final speech by saying, “While the forces of conflict and division appear to make the world a more dangerous place with each passing day, aviation is making the world a better place by bringing people together. We give hope and enable freedom. That is what drives our collective efforts to deliver safer, more efficient and more sustainable flying. Like you, I am honored to be part of this great industry.”
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