Jet shortages, volatile fuel squeeze airlines

Airlines are grappling with rising fuel costs and aircraft shortages that could limit capacity growth through 2026, as per the ACI World Airport Industry Report Q1 2026. Jet fuel prices hit $155 per barrel in March, outpacing crude oil and indicating higher refining margins, a result of geopolitical tensions and supply-side pressures, the report noted.

The tight aircraft availability is another issue: the global order backlog reached 18,100 units in May, comprising nearly 60% of the active fleet. Deliveries are lagging behind orders, resulting in a projected shortage of 5,600 aircraft. The extended delivery timelines now average seven years, hindering fleet renewal and airport connectivity growth.

These constraints are already leading to higher fares: airfares grew by 4.1% in March due to increased fuel costs and resilient demand, despite capacity expansion. However, forward indicators suggest demand may weaken as bookings for Q2 dropped sharply and capacity growth is anticipated to decelerate. Airlines face the challenge of balancing strong near-term demand with fuel costs and the limited supply of new aircraft.

To address these issues, carriers may resort to leasing strategies, delay fleet renewal, and pursue efficiency measures. Despite improving deliveries, orders still exceed deliveries, maintaining tight supply conditions and restricting capacity expansion across the aviation sector, as the report emphasized.