Global airlines battling supply chain challenges and trade tensions are relying on data insights to optimise fuel burn and minimise the impact of tariffs on their operations.

A record 4.99 billion travellers are expected to fly, lifting global airline revenue and net profits in 2025, International Air Transport Association (IATA) said in its latest forecast at its annual general meeting, in Delhi, in June.

While the fall in jet fuel prices is aiding airlines, the uncertainty caused by US tariff policies is dampening travel demand. Supply chain delays are also hurting airlines’ plans to introduce new aircraft with better amenities and lower emissions.

Sustainability in the air

Indian and overseas carriers are drawing up plans to make flying more sustainable by adopting new technology and reducing waste.

For instance, IndiGo has introduced an app for its pilots that leverages real-time data analytics and intelligent automation to monitor every phase of a flight. The app will provide actionable insights to pilots, leading to measurable improvements in operational performance and efficiency, the airline said.

Air India said it is using the latest flight planning tools to select efficient flight routes, while also reducing wastage of food, material and energy. It said 35 per cent of its new crew uniform comprises recycled fabric.

The airline has also tied up with the Indian Institute of Petroleum to develop local pathways for the production of sustainable aviation fuel (SAF).

Air India and Indian Oil Corporation (which is deploying a co-processing method to produce SAF at its Panipat plant) have also joined a global registry that tracks SAF purchases, usage and associated emission reductions in compliance with international norms.

International airlines are driving the change, too, with Brazilian low-cost airline GOL and TAP Air Portugal signing up as the first carriers to adopt IATA’s advanced analytics solution to optimise fuel consumption.

“Fuel management is key for airlines. Depending on the prevailing price of jet fuel, it generally accounts for 25-30 per cent of the cost base. On top of that, as airlines decarbonise, tracking and managing costs — which are directly related to fuel consumption — will be a growing priority,” said Nick Careen, IATA’s senior vice president (operations, safety and security).

While technology and operational efficiency improvements are expected to account for around 10 per cent of total emissions reduction, SAF will account for around 65 per cent as the aviation sector aspires to achieve its net zero target by 2050.

While airlines are doing their bit, IATA has blamed governments around the world for not creating policy frameworks to meet emission goals.

Though global SAF production will double to two million tonnes in 2025 it will only meet 0.7 per cent of airline fuel needs. (India has set a target to blend one per cent SAF with conventional jet fuel for international flights from 2027.)

“We have a quarter century to get to net zero. There is no time for delay and no tolerance for government greenwashing and unnecessary cost increases. We need urgent actions,” IATA’s director general Willie Walsh said in his AGM address.

Alongside non-availability of SAF, the ongoing supply chain disruptions and US trade policies are matters of concern for airline bosses.

IATA estimates that airlines in North America will generate the highest absolute profit among all regions, but may be affected by a slowdown in the US economy, as rising tariffs are likely to erode both consumer and business sentiment.

Change in travel plans

The impact is already visible with economy-class demand cooling off on the US-India routes due to tighter visa policies.

Joanna Geraghty, CEO of US carrier JetBlue, said the volatility around tariffs and recent safety incidents were creating uncertainty. “Consumers are confident of taking one vacation but perhaps rethinking that second vacation out of concern over tariff volatility,” she said during a panel discussion at the IATA AGM.

After an initial softness, FedEx is seeing resumption of trade as the US government lowered the reciprocal tariff imposed on various countries. The company is using data and digital tools to help customers manage the frequent changes in tariffs.

“We have a vast amount of classification data of all commodities getting into the US. We are using the data to help, especially the smaller customers, with better trade classification tools to smoothen the entry filing processes,” said Richard Smith, chief operating officer (international), FedEx.

Meanwhile, supply chain constraints continue to hinder aviation growth. While some airlines like IndiGo have seen a reduction in grounded aircraft (40 from around 70 six months ago), overall the industry situation remains grim.

Walsh said the current global aircraft delivery backlog is 17,000, implying a 14-year wait between order and delivery. The number of deliveries scheduled for 2025 is 26 per cent lower than what was promised a year ago, he said.

“Supply chain constraints are delaying fleet modernisation and causing flight disruptions because of parts shortages. Suppliers must urgently address the constraints. Airlines are enablers of connectivity, but they cannot fly with their hands tied,” said Subhas Menon, director general of Association of Asia Pacific Airlines.

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Published on June 15, 2025