The oil shock is not fading from the headlines and is leaving red ink on airline balance sheets

At first glance, aviation is beginning to look remarkably normal again. Global scheduled seat capacity reached 137.1 million in the week to 21-Sep-2026, 1.6% above a year earlier, while outside the Middle East capacity and traffic are broadly reverting to familiar seasonal patterns.

Yet the industry's underlying economics are moving in the opposite direction. Jet fuel has climbed back towards USD200/bbl, with the average price reaching USD194.90/bbl in the week to 18-Sep-2026 - 116.4% above a year earlier - while the fuel crack spread was up 219.2%.

The latest issue of CAPA - Centre for Aviation's Airline Leader Briefing points to an aviation market caught between resilient demand and deteriorating cost conditions.

International tourist arrivals were broadly flat in 1H2026, large aircraft deliveries are finally accelerating and several markets continue to grow. But airline financial results are weakening, consumer behaviour is becoming more price-conscious and the oil market has become increasingly difficult to forecast.

The central question is no longer whether aviation can operate through the crisis. It can. The question is how much financial damage is accumulating beneath that operational resilience - and whether airlines enter 2027 with materially weaker balance sheets just as the next phase of the cycle begins.