Things Are Moving in Air Transport
Movement is one of the defining characteristics of air transport, and that is quite normal. But since the beginning of 2026, we have been witnessing changes that are likely to have a lasting impact on this sector. Despite the current difficulties, which we hope will soon be behind us, the trend appears to be moving towards improved service quality combined with a general increase in fares.
The best example is still provided by Emirates. It has just published its results for the 2025/2026 financial year, which ended on March 31 this year. The results are impressive. Although the number of passengers declined by 1% to 53.2 million, revenue increased by 2% to $35.7 billion and, above all, net profit reached an unprecedented level of $5.4 billion. The load factor fell slightly to 78.4%, compared to 78.9% the previous year, but yield increased by 4%, representing revenue of $10.4 per passenger kilometre transported. This avalanche of figures leaves us dreaming, as it clearly demonstrates the company’s outstanding performance. Emirates also maintains a highly prosperous net cash position of $15 billion, allowing it to cover its fuel purchases over a long period and greatly mitigate the effects of oil price spikes. In total, the company generated a net profit equivalent to 15% of its turnover, representing one of the best performances ever seen in air transport.
This is the result of a strategy based entirely on service quality and reasonable pricing. It relies on the regular renewal of its fleet, which currently numbers 277 long-haul aircraft, as well as strong cooperation with dnata, its parent company, which manages among other things airport activities in Dubai.
I also note that product improvement has become a constant in today’s air transport industry. Traditional airlines that had allowed their service quality to decline in order to align fares with those of low-cost carriers are now moving in the opposite direction. It must be recognised that all major carriers have undertaken to rethink their products, from airport access to in-flight services. So much so that airlines which had abandoned the concept of first class are now in the process of reintroducing it. I also note that improving service quality in premium cabins inevitably benefits economy class as well and gives crews a greater sense of pride, encouraging them to interact even better with customers. This strongly resembles the beginning of a virtuous cycle that can only be welcomed.
Low-cost airlines have also followed this new direction. We can even see American operators such as JetBlue opening lounges in airports. These same low-cost carriers are now embracing distribution through travel agents and GDSs, something they had fiercely resisted until now. We even see an airline such as Ryanair, long known for defending the lowest possible fares through the support of local authorities, backtracking in the face of the growing need to abandon practices that once made it successful. Public subsidies will indeed be completely banned in Europe, at least.
Conversely, proponents of ultra-low fares may struggle to survive. A major operator such as Spirit Airlines was forced to shut down because the support it expected from the federal authorities, promised by Donald Trump, ultimately failed to materialise. In Europe, carriers known for very low fares such as Wizz Air or Volotea also have reason for concern, although they provide a valuable service by operating routes abandoned by traditional airlines. Without public support, it is difficult to see how they will withstand the impact of rising Jet A1 fuel prices, since they have little or no protection against fuel price increases, unlike the major carriers.
To overcome these difficulties, relations between so-called regional airlines and local authorities may need to be fundamentally rethought. Rather than granting subsidies, which are clearly unsustainable, regional authorities would be better advised to purchase air services from carriers through competitive tenders, with revenues managed by the contracting authority. However, this may require a revision of existing public regulations. Such a procedure already applies to regional rail transport, and it is difficult to see why it should not also be extended to air transport.
A prosperous air transport industry is possible provided that we avoid excesses and accept that every service has a real cost, and that selling below that cost is ultimately suicidal.
