ING released its aviation industry outlook report on October 27, stating that global air passenger demand is expected to recover to approximately 5% growth in 2027. However, geopolitical conflicts, high fuel prices, and limited aircraft supply will continue to squeeze airline profits. ING predicts that aviation fuel costs will account for nearly 35% of the industry's operating costs from 27% in 2025. Even if the Middle East conflict eases and oil prices fall, tight refining capacity and low inventories may keep aviation fuel prices high in 2027. European airlines previously buffered cost shocks through fuel hedging, but these contracts will gradually expire in 2027, putting further upward pressure on ticket prices. Low-cost carriers face greater pressure due to their higher proportion of fuel costs and passengers' greater sensitivity to fares. Meanwhile, Airbus and Boeing have a combined backlog of approximately 15,000 aircraft orders by mid-2026, and delivery constraints will continue to limit capacity expansion. ING believes that even if ticket prices fall due to lower fuel costs, they are unlikely to return to early 2026 levels.
