In this month's webinar, OAG Chief Analyst John Grant and Deirdre Fulton were joined by Mayur Patel (Regional Commercial and Industry Affairs Leader, OAG) and Shukor Yusof (Founder of Endau Analytics) to discuss which markets are thriving and which are just surviving as winter approaches, including how Asia Pacific carriers are responding to sustained higher fuel prices and whether capacity discipline will hold.
Key takeaways from the discussion:
Winter is putting pressure on airlines, with several struggling in Europe: Winter is always the more challenging season for airlines, and there is a lot of concern about how the market will evolve over the next five months. The economic environment, sentiment about consumer demand in some markets, the price of oil and the lack of resolution to geopolitical events all add to the worry. In Europe, Dan Air looks like it will cease operations, airBaltic is in a Chapter 11 situation, easyJet is cutting capacity, and Ryanair has also cut capacity this winter.
Asia’s international growth is a mixed picture: Growth from Asia to other regions varies by destination. There is strong growth from Asia to Europe, but a bit of a slowdown to Australia and to Africa, making it a mixed picture across some of the key source markets. Across the next ten biggest region pairs, there is still some optimism on international growth.
The widening gap between crude oil and jet fuel prices is adding to cost uncertainty: Jet fuel and crude oil prices have historically moved closely together, which is why airlines typically hedge against crude, but the gap between them is widening. This opens the door to much greater uncertainty, and for European airlines, a key issue will be how much of their fuel is hedged for the first half of 2027. Airlines are passing some of the cost on through fuel surcharges, but whether passengers will keep paying is an open question.
Strong demand in India is spilling over to carriers such as Singapore Airlines: India’s demand is huge, and with the Gulf carriers absent, a lot of it is spilling over to other carriers. Indian travellers are connecting through Singapore, Kuala Lumpur, Bangkok or Hong Kong on to North America, with Singapore Airlines the main beneficiary right now. The view is that Indiawill remain very strong next year. Separately, some European airlines are not going to fly to the UAE and other markets until at least the end of November, if not the whole winter programme.
Watch the full panel discussion below, and download the slide deck for the complete data.
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