Global aviation industry cautiously reacts to US-Iran two-week ceasefire

Following President Donald Trump's announcement of a two-week ceasefire with Iran, global oil prices fell below $100 per barrel, leading to a rally in airline stocks worldwide. Despite this, Willie Walsh, director general of the International Air Transport Association, warned that aviation fuel prices will likely remain elevated for months due to damage to Middle Eastern refining capacity. Jet fuel prices have more than doubled since the conflict began, and fuel typically accounts for 27% of airline operating costs. Delta Air Lines has forecasted lower second-quarter profits and expects a $2 billion increase in fuel expenses, leading to planned capacity cuts. Walsh noted that the crisis recovery is expected to mirror the 2008-09 downturn or the post-9/11 period, taking between four to twelve months. Financial experts warn that while the temporary pause reduces geopolitical risk, energy prices will likely remain structurally high. Airline stocks in Asia and Europe, including Lufthansa, Air France-KLM, and Qantas, saw gains ranging from 5% to 14% on the news.