The news: The war in Iran is set to weigh on airline profits and travel demand this year, according to the International Air Transport Association (IATA)'s latest forecast.

• Higher jet fuel prices will cost global operators an additional $100 billion this year, slashing profits in half.
• Passenger traffic growth is expected to slow to 2.1%, well below the 5% historical average and the IATA’s prior forecast of 4.9% in December 2025.

The big picture: It’s no surprise that global interest in air travel is declining as rising jet fuel costs push prices up. Kayak data cited by Axios found that prices for international flights are nearly $200 more YoY, while the average domestic fare is up almost $100. With airfare and other costs rising, more consumers are opting for lower-cost destinations or road trips to save money. One in 3 consumers say they plan to travel less due to rising costs, while 1 in 4 are choosing cheaper or closer destinations and being more strategic about when they book, according to an April YouGov survey.

But there’s one cohort that isn’t deterred by higher prices: wealthy consumers, who are expected to account for 55% of the traveling public this year, according to Deloitte. They are not only less vulnerable to cost-of-living pressures, but are also more willing to spend on premium experiences—to the benefit of airlines like United and Delta.

• United CEO Scott Kirby said he was “a little surprised” by the lack of resistance to the airline’s higher airfares.
• Delta’s core customer “has an insatiable appetite for premium experiences” and seems “really excited about spending money,” Delta president Peter Carter told Bloomberg.

Implications for travel: Airlines’ focus on the affluent customer makes sense in the short term, since these consumers have the discretionary budgets and confidence to spend big on travel. There are also more of them: A recent report by conservative think tank American Enterprise found that the share of upper-middle-class households increased by nearly 10 percentage points between 2001 and 2024.

However, a point may come when even affluent consumers become less willing to pay for premium travel experiences. Companies have to make sure the experience they deliver is commensurate with the price—or else risk alienating both cost-sensitive and wealthy customers alike.