IATA has rallied against the implementation of sustainable aviation fuel (SAF) mandates, claiming that compliance fees charged by producers have doubled the cost of SAF for airlines in Europe since the start of the year. SAF mandates came into effect in the European Union and the UK on 1 January, meaning that 2% of jet fuel uplifted in 2025 at UK and EU airports must be SAF. This percentage will gradually increase between now and 2050. Global SAF production is expected to double this year, to 2 million tonnes, although it will account for just 0.7% of the aviation industry's total fuel needs. Half of that volume is "heading toward Europe", says IATA, and, at current market prices, the cost to European airlines will be $1.2 billion, it adds. But the airline trade association estimates that SAF producers and suppliers will charge an additional $1.7 billion in compliance fees, making SAF "five times" more expensive than conventional jet fuel. "This highlights the problem with the implementation of mandates before there are sufficient market conditions and before safeguards are in place against unreasonable market practices that raise the cost of decarbonisation," states IATA director general Willie Walsh. "Raising the cost of the energy transition that is already estimated to be a staggering $4.7 billion should not be the aim or the result of decarbonisation policies. Europe needs to realise that its approach is not working and find another way." IATA wants governments to redirect some of the $1 trillion in global subsidies it says are granted to fossil-fuel companies towards helping scale up SAF supplies. It is also calling for a "comprehensive approach" to renewable energy policies, to ensure that enough renewable energy is allocated to the production of SAF. The association is also urging governments to make eligible emissions units available for airlines to purchase and claim against their obligations under ICAO's Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). In April, IATA launched a SAF registry aimed at making it easier for airlines to accurately account for and report their emissions reductions from SAF.

Air India chief executive Campbell Wilson has played down the likelihood that the ongoing ban on its aircraft entering Pakistani airspace will have a significant impact on the company. Asked during a media briefing at IATA's AGM about reports that the airline has nominated a cost of $600 million annually in response to queries from the Indian government, Wilson said the overall figure was more nuanced. "Obviously, that fluctuates as we make our own adjustments and mitigations, but it is significant, but as I say, we're maintaining our existing schedule essentially," Wilson adds. "So it's a frustration for everyone involved, but just one of those things that we all deal with in aviation, $600 million over which period should it last one year and we not mitigate it in any way." Wilson says that the restrictions are increasing flying times to Europe by around an hour and up to three hours to North America, with the airline taking measures to counteract some of that impact for passengers. "North America, we're maintaining most of the flights as nonstop, albeit in some cases with a payload restriction. In a couple of cases, we're doing an enroute refuelling stop, but it's a very short one, so the customer experience is not significantly affected," he adds. Pakistan closed its airspace to all aircraft operated by and for Indian airlines on 24 April, shortly before hostilities broke out between the two countries. India subsequently responded with its own ban on Pakistani carriers on 1 May. The closure has particularly impacted flights operating north from Delhi, many of which have been forced to reroute over the Arabian Sea. Asked later about the demand environment, Wilson acknowledges that the conflict did affect domestic demand in late April and early May "which has since recovered", while the period also saw some impacts from airport closures in India's north. "And then there's a little as I talk about, impact on flight times and the like, although not necessarily on frequencies, little bit on payload. So the demand environment still remains very buoyant. It's just there's been some challenges from the external factors over the past couple of months."

Tariffs imposed or threatened by the US government are a form of emotional manipulation, in the view of IATA's chief economist Marie Owens Thomsen. Speaking on 2 June during a panel discussion at IATA's AGM event in Delhi, Owens Thomsen said "we are totally being manipulated" by ever-changing threats of tariffs. "We should try to avoid being manipulated emotionally," she argues, while acknowledging that such avoidance is difficult at best. "I think we are totally being manipulated… when we jack up tariffs to 150% and then bring them down to 30% maybe or 10%, and think that that's good." She adds: "It's sort of like how I feel about my personal weight. I go high up, and then I go down to something lower, but it's still higher than it was, and that I feel better is obviously mental." Henry Wilkinson, chief intelligence officer at risk-analysis firm Dragonfly, suggested during the panel discussion that the effects of tariffs might run deeper than emotional manipulation, and could serve to destabilise global alliances and extend armed conflicts in Europe and the Middle East. "The question of tariffs is really important," Wilkinson says. "What we're seeing is that this decoupling of nations – this reduction of these economic inter-dependencies – is really critical, and the reason for that is: one, because it removes incentive for peace; but two, it also blunts the effect of sanctions." Describing sanctions as "the primary peaceful [method] for deterring conflict and trying to bring it to a resolution", he asks: "When sanctions are off the table and economic independence is falling, what are the tools of statecraft?"