Consumer resilience continues amid high fuel costs

A panel discussion at the IATA Congress 2026 in Rio de Janeiro examined the surprising strength of demand despite elevated fuel prices and shared their greatest concerns for the industry. Eleanor Budds of S&P shared that well because for a start the supply has been lost from the market and secondly there is a risk premium so there is a risk premium on prices and that the market will react to fundamentals, supply, demand, and it will react to risk and that at the beginning the supplies were still coming but the market reacted to the risk perception that those supplies would stop and that volatility and the crude price always reacts to sentiment and risk in the market.

When asked about his worst nightmare in the current geopolitical situation Adrian Neuhauser of Abra Group shared that it is drop in demand and it is drop in demand. Luis Rodrigues of TAP Air Portugal shared simply drop in demand. Güliz Öztürk of Pegasus Airlines shared yeah drop in demand but she could not choose between drop in demand versus fuel shortage. Con Korfiatis of Oman Air shared that the nightmare or the reality the reality is the jet fuel and the nightmare would be that demand dropped as a result as well. Adrian Neuhauser of Abra Group shared further that what we believe right what we are seeing as we pass through the cost of jet fuel into pricing is we are seeing very little demand drop from the consumer and that our theory is the ticket ultimately a small piece of the overall trip expenditure you make it a little more expensive yeah there is ways to offset that one less restaurant meal a cheaper hotel what have you but the problem is there is price increases that have nothing to do with this right there is inflation running through the system the supermarket is more expensive your power is more expensive at some point does the consumer just say I am not going to travel and you cannot fix that with price right that is the drop in demand it is income elasticity and if that happens you are in trouble.

Güliz Öztürk of Pegasus Airlines shared that but demand is always not under our control so it is much more critical to fix it and that if there is a demand because of uncontrollable conditions it may take time to bounce back but the cost itself either with hedging mechanisms or let us say if it is a global issue that will be fixed at the end and a supply is a shortage for example that will be an alternative way an alternative route will be found at the end so demand is very critical. Adrian Neuhauser of Abra Group shared that if someone had set this scenario up last year and said hey we are going to have a war and fuel is going to be at four dollars and how much of a crisis is it going to be versus where we are look we are aggressively passing pricing through and customers are responding and the booking curve is shorter but customers are showing up they are buying and we are seeing the planes fill up with higher yields and that yields are higher than any of us thought would be tolerable and we are not seeing softness in demand so certainly a new world and yet again resilient.

Luis Rodrigues of TAP Air Portugal shared that so far the market is there and the demand is there and that people understand because they go to work every day and they have to fill up the gas at their cars right so it is not different with airlines so they understand that with what is going on they have to pay a little bit more if they want to preserve their vacation and their business trips and so on so at least in this crisis there is something good coming out of it is that the demand is still there for the time being. Con Korfiatis of Oman Air shared that in the areas of the countries he has worked over his years and he has been over thirty years at it as well he has never seen fuel levies not to some extent traded away and that statistically an element of them does get traded away and that our average fares are higher but not to the extent of the fuel price increase.