Asia-Pacific airlines are protecting their longhaul networks while trimming shorthaul and regional frequencies as jet fuel prices near US$160 a barrel erode margins heading into the autumn flying season, according to Alton Aviation Consultancy.
Clark Johns, Auckland-based director at the consultancy, noted that regional jet fuel traded near US$160 a barrel as of 21 August – about 75 per cent higher than a year ago – with the crack spread between crude and jet fuel holding between US$60 and US$65.
Citing the International Air Transport Association’s June 2026 Global Outlook for Air Transport report, Johns said Asia-Pacific carriers are now expected to post a net profit of about US$6.6 billion in 2026, down from US$9.8 billion in 2025, with profit per passenger expected to drop to US$3.40 from US$5.30.
Globally, the same revision nearly halved the year’s profit forecast from US$41 billion to US$23 billion, based on jet fuel projected to average US$152 a barrel across the full year.
“There has certainly been some reduction across the Asia-Pacific region because of higher fuel prices, but where we have seen a good amount of it is more on shorthaul and regional flying,” Johns said. “You cannot cancel your one daily flight to London, because that is how you transit customers to the rest of your network. Where you fly a market five times a day, you can drop to four on some days of the week and recapture those customers on fewer flights.”
The conflict reshaped transit flows in the region’s favour in the near term. As Gulf carriers pulled capacity, demand held for nonstop Asia to Europe services and for connections through Changi, Hong Kong, and mainland Chinese hubs. Singapore Airlines and Cathay Pacific, alongside mainland Chinese operators, absorbed much of the redirected traffic, while Suvarnabhumi drew some benefit as Thai Airways expanded its European network breadth.
Chinese carriers gained further from overflying Russian airspace, which other airlines avoid, leaving a narrow corridor that lengthens trip times, increases fuel burn, and raises crew costs on rerouted longhaul flights.
Johns does not view the shift as permanent. “I wouldn’t call that a structural shift,” he said. “The Gulf carriers are still rebuilding capacity, and long term we expect a return to the equilibrium that was in place before the conflict.”
The cost pressure lands unevenly. Full-service carriers with business and premium traffic can pass more of the higher fuel bill into fares, Johns noted, whereas low-cost and ultra-low-cost operators face sharper demand impacts, as a 20 to 30 per cent fare increase deters price-sensitive leisure and visiting friends and relatives travel.
With fuel volatile and a delivery backlog of more than 16,000 aircraft forcing carriers to fly older jets longer, Johns said the region’s airlines are planning for prolonged uncertainty.
“Airlines right now are having to operate in what is a challenging new normal that requires them to be more flexible in how they plan, and adaptive from their fleet decisions to how much cash they hold on the balance sheet,” he concluded.
