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Asia-Pacific airlines poised to grow despite cost headwinds, S&P Global Ratings reports
August 27th 2026
“The airlines have deleveraged over recent years, and therefore have stronger balance sheets to absorb hits from higher fuel costs caused by the Middle East conflict and currency depreciation. Read More » Moreover, we expect passenger air traffic in Asia-Pacific to remain resilient, bolstered by growing middle classes in general and the upward economic trajectories of China and India in particular,” S&P Global Ratings said in its “Asia-Pacific Airlines: High Costs Won’t Divert Growth Ambitions” report published this week. The rating company confirmed that Asia-Pacific airlines are likely to remain the world’s fastest-expanding aviation market, with close to 5,700 aircraft on order and more than US$300 billion in capital commitments. “The average fleet age of Asia-Pacific is 10 years, younger than the global average at 15 years. Still, we believe airlines in Asia-Pacific will seek to renew their fleet to improve fuel efficiency and prepare for stricter environmental standards,” S&P reported.
Currently, the region’s airlines are affected by adverse conditions, including high jet fuel costs and currency depreciation against the dollar. “We expect more meaningful recovery from the fourth quarter onwards. Resilient demand despite higher fares will help the sector as oil prices ease. Still, immediate strains will take a toll on upcoming earnings reports, particularly for low-cost carriers because they have thinner profitability cushions, but nonetheless, these airlines will push through growth to remain competitive,” the authors of the report said.
In its report, S&P assumes Brent prices will fall to US$80 a barrel in 2027, compared with US$110 a barrel this year.
The report is based on data from 22 publicly listed airlines, which in aggregate account for close to 85% of the market capitalization of airlines in Asia-Pacific, S&P said.
