The International Air Transport Association (IATA) has warned that escalating jet fuel prices, driven by the ongoing conflict in the Middle East, could lead to increased bankruptcies and mergers within the airline industry. Willie Walsh, IATA's director general, noted that budget airlines, lacking higher-margin revenue streams, are particularly at risk. The recent collapse of U.S. budget carrier Spirit Airlines exemplifies the strain on the sector. Walsh anticipates that more airlines will face bankruptcy, while others may be acquired by larger carriers. Despite these challenges, he believes that the low-cost airline model is not broken, citing the success of Ryanair in Europe. The conflict has also disrupted traffic through key Middle Eastern hubs, but Walsh does not foresee permanent damage to Gulf carriers like Emirates and Qatar Airways, which account for 14% of global capacity. Additionally, delays in aircraft and engine deliveries are compounding financial pressures, with Walsh criticizing manufacturers for not sharing the burden of supply chain disruptions. IATA remains committed to achieving a net zero emissions target by 2050, despite the increased challenges posed by the current situation.