IATA's Willie Walsh Talks Tariffs, ATC Woes, and Oil Prices

In this special edition of the Airline Weekly Lounge, Gordon Smith shares highlights from a recent interview with Willie Walsh, Director General of IATA and former CEO of IAG. From Trump's tariffs to Russian airspace, and oil prices to sustainable aviation, you can't afford to miss this wide-reaching discussion with one of the industry's biggest names.

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Key Takeaways

1. Supply Chain Strain Persists
   The aviation industry continues to face supply chain disruptions, especially among tier 2 and 3 suppliers.
2. Europe Needs to Rethink Regulation
   Walsh criticized the EU’s approach to sustainability mandates like SAF quotas, warning they risk making European carriers globally uncompetitive. IATA is pushing for smarter, globally-aware regulation.
3. Trump’s Second Term Brings Market Uncertainty
   Early days of Trump’s second term have led to uncertainty, reduced transborder bookings (notably between Canada and the U.S.), but also a modest increase in air cargo traffic due to tariff-driven frontloading. The longer term impact remains unclear.
4. Oil Prices Are a Double-Edged Sword
   Low oil prices benefit airlines but typically correlate with lower yields and ticket prices. Walsh sees $60 oil as positive but cautions against relying on this lasting long term.
5. Hedging Still Matters in a Volatile World
   Despite a broader trend against fuel hedging, Walsh discusses the pros and cons as a risk management tool.
6. North Atlantic Demand Is Stable
   Walsh sees no major concerns about U.S.-Europe travel demand, noting stable leisure markets like U.S.–Ireland.
7. U.S. Air Traffic Control Reform Welcomed
   The industry strongly supports overhauling the ATC system, citing inadequate staffing and outdated infrastructure as major constraints on efficiency and safety.
8. Sustainability Targets Must Be Realistic
   Walsh criticized arbitrary climate targets (e.g. 5% SAF by 2030) as lacking data-driven planning. He emphasized the need for realistic, coordinated actions from all stakeholders—fuel suppliers, OEMs, and governments.
9. Airspace Decisions Should Stay Airline-Led
   Walsh defended letting airlines make their own risk assessments when navigating complex global airspace, highlighting differences in aircraft, crew, and operational context that governments can't standardize.