Analysis Reports

Approaching four years since its Jun-2022 start of operations, Norse Atlantic Airways is something of an enigma.

It has been hailed by Skytrax as the world's fifth best long haul airline for 2025, and the best in Europe. It achieved an industry-leading load factor of 96% and a flight completion rate of 99.4% in 2025.

However, its fourth successive annual loss in 2025 is a reminder that it has yet to report an annual profit, and its original mission of operating scheduled long haul low cost services on the North Atlantic struggled to generate enough demand to fill its aircraft throughout the year.

A strategic shift to reduce its reliance on the summer-led Atlantic, while adding winter services to Thailand and South Africa within a smaller overall network has improved the performance of its own operations.

Combined with a simultaneous move into third party flying, most notably for IndiGo on India-Europe routes, Norse Atlantic has improved its aircraft utilisation, decreased its revenue risk, and offered itself a path to margin improvement.

Australia is one of those countries where there is no clear 'main city' and, the capital territory apart, the battle for appropriate recognition is mainly between the two largest cities, Sydney and Melbourne.

Sydney's airport is a little busier, and this year there will be the opening of a second airport there in the west of the conurbation, which might split existing traffic flows to a greater degree than is the case in Melbourne.

For its part, Melbourne's main Tullamarine Airport will make the second largest single project airport investment in the country's history on a terminal expansion basis, in addition to the third runway that should be completed by 2031 - putting it on par with Sydney's Kingsford Smith Airport - and an air rail project that will connect it to the city and suburban areas.

Tullamarine already benefits from 24/7, and these initiatives will ensure it continues to compete with Sydney for new routes, including those that are part of 'Project Sunrise' (that will connect the heavily populated southeast quarter of Australia directly to Europe and North America).

China was the origin of the coronavirus COVID-19, and accordingly its aviation business suffered from its pandemic onslaught worse than other countries.

Yet within China the impact varied between cities and regions, for numerous reasons, and one airport - Guangzhou Baiyun - briefly became the world's busiest, outshining airports such as Atlanta, Dubai International and Beijing Capital; the latter having been the world's second busiest in 2019 and one of only two airports ever to exceed 100mppa.

As Beijing Capital is the country's main gateway to the capital one might have expected it to have resumed full operations by now, but that is not the case. It has slipped to 15th busiest globally in 2025, and passenger traffic is only at 70% of 2019 levels.

Worse still, it has been hemorrhaging money, losing as much as USD1.6 billion over five years, with further losses anticipated for 2025.

With luck it might break even in 2026.

The reasons for this state of affairs are more complex than just the lingering impact of the pandemic, and include ageing infrastructure and the consequence of the opening of Daxing Airport in 2019, which is now proving to be a classic case of the strategic issues that can be caused by dual hub operation.

Before the military strikes against Iran by the US and Israel, US airlines appeared to be acclimatised to a certain level of policy uncertainty, stemming from the administration of President Trump.

And while the latest conflict in the Middle East should have little effect on US airlines from a network perspective, its duration could create even greater uncertainty around the country's economic prospects, and possibly disrupt previous assumptions made regarding demand in 2026.

The coming weeks could offer clues about how disruption in the Middle East could influence demand as airlines begin to reinforce, or issue, different guidance for their respective first quarter performances, which (in some cases) were moulded by a K shaped economy.

The sudden surge in global oil prices following escalating conflict in the Middle East has once again placed airline fuel strategies under intense scrutiny.

In just a week, crude prices have jumped nearly 40%, raising the spectre of USD150 oil and triggering concerns across the aviation industry about cost exposure, profitability and the resilience of airline business models.

For airlines, fuel remains the single largest variable cost, and the current shock is revealing stark differences in how airlines manage risk.

North American airlines have largely abandoned fuel hedging programmes in recent years, leaving them exposed to rapid price swings.

In contrast, many European airlines continue to maintain substantial hedge coverage, extending several years into the future.

Meanwhile, Asia Pacific airlines adopt a mix of strategies, shaped by regulatory frameworks and varying levels of market exposure.

This report examines which airlines are most vulnerable to rising jet fuel costs, how different hedging policies may cushion - or amplify - the impact, and what the current geopolitical shock means for airline financial performance in 2026 and beyond.

As oil markets react to geopolitical volatility and supply disruptions, the aviation industry faces a familiar question: in a world of unpredictable crises, does fuel hedging still offer a strategic advantage - or simply another layer of risk?

The fallout from the latest conflict in Iran highlights how reliant the Australian and Indian markets are on Middle Eastern airlines and airports.

With the war zone spreading across the Middle East since 28-Feb-2026, the large Gulf airlines had to stop most scheduled flights out of their home bases.

This had a huge effect on many markets given the importance of these airlines and hubs to the global air travel network. In the Asia Pacific region, the two markets most affected were Australia and India.

The big Middle Eastern airlines are a major presence in the Australian market - and even more so in India.

For Australia, it's about connectivity. The Gulf hubs - primarily Dubai - are an important linkage between Australia and Europe.

The Gulf hubs draw a lot of connecting traffic from India too, and they also allow airlines to tap into demand from the massive numbers of Indian workers in the Middle East.

The latest escalation centred on Iran has rapidly shifted from a regional security crisis to a systemic event with global ramifications.

What initially appeared to be another episode of Middle East volatility, has instead exposed the degree to which the modern air transport system is structurally dependent on a narrow geographic corridor linking Europe, Asia and Africa.

Within hours of the first military actions, multiple states enacted partial or full airspace closures, triggering thousands of cancellations, widespread diversions and a complex web of crew and aircraft dislocations.

Short term impacts - mass cancellations, airspace closures and cascading delays - are severe and quantifiable.

But the deeper effect is strategic: the episode exposes a fragile dependence on a single geographic crossroads, and could force a re-evaluation of network design, fleet strategy, insurance economics and hub resilience.

Asia Pacific aviation is entering a decade defined as much by workforce constraints as by traffic growth. Forecasts pointing to a requirement for more than 400,000 additional aviation professionals highlight a structural challenge that extends well beyond cyclical labour shortages.

Airlines across the region already struggle to recruit and retain pilots, engineers, cabin crew and digital specialists, even as fleet expansion and network growth accelerate. This widening gap between demand and supply raises fundamental questions about the sustainability of the region's growth trajectory.

This session from the CAPA Airline Leader Summit - Asia examines the workforce implications of Asia Pacific's expansion in a changing labour market.

It explores whether aviation's traditional value proposition still resonates with younger generations, how shifting expectations around work-life balance, career mobility and purpose are reshaping recruitment, and why training pipelines are failing to scale in line with demand. The discussion also considers the growing role of automation, AI and digital tools in alleviating pressure on scarce skills, while acknowledging the limits of technology as a substitute for human expertise.

The session reframes workforce strategy as a central pillar of competitiveness and resilience. Talent shortages are no longer a temporary constraint but a defining strategic risk, shaping fleet plans, network development and service quality. It provides a structured lens through which to assess how airlines can reposition themselves as employers of choice, build more resilient talent ecosystems and compete effectively for scarce skills in an increasingly global labour market.

For several years now the Kenyan Airports Authority (KAA) has intended to expand Nairobi's Jomo Kenyatta Airport quite considerably, by modernising existing terminals, building a new one and adding a second runway.

It was needed for two reasons - firstly, because capacity had been exceeded, and secondly, because the main terminal building opened in 1978, which is almost 50 years ago.

That said, Nairobi has lost its way a little as a gateway to and hub for East Africa, mainly to Addis Ababa, but there are new challengers on the horizon as well, such as the Bugesera airport project in Rwanda.

India's Adani Airports applied to improve the infrastructure in Mar-2024, by way of a 30-year lease agreement, but that proposal met stiff opposition due to concerns about transparency and terms, and the Kenyan government officially terminated the agreement on 24-Feb-2026.

Now the government will go it alone, but not completely, as it will seek private sector collaboration on individual projects such as a new terminal building by way of public-private partnerships. Adani could apply, but it has set its stall out as a whole airport operator - so that is unlikely.

This report looks at the options for reconfiguring the terminals in the light of changing demand, and the fact that two new airports in nearby countries will offer very tough opposition.

And in a late development just before publication the Airports Authority has issued a tender for the construction of new facilities and upgrades to existing infrastructure while confirming that an 'airport city' and special economic zone will be built.

The country's Prime Minister then went on to announce the establishment of a National Infrastructure Fund to close the infrastructure financing gap by raising over KES5 trillion (USD38.67 billion) to fund key projects and that it will provide the necessary financing for projects such as the expansion of Nairobi Jomo Kenyatta International Airport.

Approximately one year after former Canadian Prime Minister Justin Trudeau urged the country's residents to avoid travelling to the US, Canadians continue to heed that call - and Canadian airlines continue to redeploy transborder capacity into more promising markets - particularly Latin America and the Caribbean.

Despite still-robust geopolitical tensions between the two countries, and declining passenger numbers in the transborder market, the US remains strategically important to Canadian airlines.

Look no further than Air Canada's sixth freedom success and the decision by Porter Airlines to add new flights, even as demand remains below historical levels.

The push by Canadian airlines into Latin America appears to be paying off as those operators, reflected in positive statements from those airlines about their prospects in the region.