Aviation Under Pressure: What Breaks First?

Season 2, Episode 9 | May 13th, 2026

This episode examines the growing structural pressure affecting the global aviation industry and analyses whether airlines are entering a prolonged phase of defensive management rather than expansion.

The discussion highlights how multiple stress factors — fuel volatility, widening crack spreads, geopolitical disruption, operational fragility, airport saturation, OEM delays, crew shortages and financial pressure — are no longer isolated events, but increasingly interconnected risks capable of destabilising airline networks globally.

A central theme of the episode is that operational resilience is rapidly becoming the defining competitive differentiator in aviation. The panel argues that airlines are now operating with materially reduced operational buffers following the pandemic, while simultaneously facing increased complexity, constrained fleet availability and a shortage of experienced operational talent. This has elevated functions such as Crew Planning and Operations Control from support functions to strategic riskmanagement disciplines.

The episode analyses current industry developments including:

• The widening disconnect between Brent crude and jet fuel prices due to elevated crack spreads

• Operational and cost pressures linked to Middle East airspace disruptions

• Capacity management and resilience preservation by Gulf carriers

• Operational instability at major network airlines

• Structural vulnerabilities in the ultra-low-cost carrier model

• The relative positioning of Latin American network carriers

• The emerging strategic importance of India and Turkish Airlines within the Europe–Asia market transition

• The evolving regulatory and infrastructure environment in Mexico.

The discussion concludes that the next phase of industry separation will likely occur between airlines capable of disciplined execution and those relying primarily on strategic narrative without sufficient operational depth. In the current environment, the panel argues that operational excellence is no longer a competitive advantage alone — it is increasingly a prerequisite for survival.

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Full Transcript

INTRO – ARTURO

Welcome to Altitude. Let us talk about aviation… seriously.

Today, we are not analysing a single isolated news story.

We are analysing an entire system operating under pressure.

Because what we are witnessing is no longer a series of independent events:

• Energy crisis

• Geopolitical restrictions

• Operational fragility

• Airport saturation

• Shortage of operational talent

• Growing financial pressure

Everything is beginning to connect.

And the central question of this episode is very clear:

What breaks next in global aviation?

Because many airlines are no longer operating in expansion mode.

They are operating in defensive mode.

And that completely changes the logic of the industry.

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GLOBAL CONTEXT – NICOLÁS

Let us frame the context clearly.

Over recent weeks:

• Jet fuel prices have once again decoupled from Brent crude

• The crack spread has widened materially

The crack spread is a critical indicator in both the oil and aviation industries, measuring the margin between crude oil prices and refined products such as jet fuel, diesel or gasoline.

In simple terms:

Crack spread = refined fuel price – crude oil cost

This matters enormously for airlines because jet fuel prices are not determined solely by Brent or WTI crude prices.

An airline may see oil prices stabilising or declining, while still paying materially higher jet fuel prices if refining margins widen.

This occurs when there is:

• Limited refining capacity

• Refinery closures

• Logistics disruption

• Wars or sanctions

• High distillate demand

• Environmental restrictions

• Maritime route disruption, such as the Strait of Hormuz

And even when crude oil stabilises temporarily…

The real cost pressure on airlines remains exceptionally high.

That is extremely dangerous.

Because fuel ceases to behave as a temporary variable and instead becomes a structural margin pressure.

Another major issue is now emerging:

The Middle East.

Lufthansa has already announced cancellations and capacity reductions into certain regions due to operational and energy-related concerns.

KLM has also experienced operational adjustments and higher costs resulting from longer routings and airspace diversions.

This creates a domino effect:

• Longer flight times

• Higher fuel burn

• Increased crew hours

• Lower fleet utilisation

• Greater pressure on connectivity

• Higher operational vulnerability

In other words:

A regional conflict ultimately impacts the global network.

And there is another highly relevant development.

Qatar Airways currently has close to 28% of its fleet out of operation.

We are talking about approximately:

• 194 active aircraft

• 76 parked aircraft out of a fleet of 270

• More than 300 aircraft still pending delivery

That reflects something very important:

Even the major Gulf carriers are now managing capacity with far greater caution.

This is no longer aggressive growth.

It is resilience preservation.

Arturo, this is beginning to look far more structural.

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OPERATIONAL FRAGILITY – ARTURO

Absolutely.

And there is something here that concerns me greatly:

The industry is losing operational stability.

This is no longer only about fuel.

It is the entire system operating without sufficient buffers.

I would divide it into three areas.

1. Disruption has become structural

Historically, crises were temporary.

Today they are simultaneous:

• Extreme weather

• Airspace restrictions

• ATC congestion

• Parts shortages

• Grounded engines

• Limited crew availability

• Financial pressure

All at the same time.

And that undermines operational stability.

2. Operational knowledge has been lost

A very clear example is Delta Air Lines.

We recently saw up to 350 cancellations linked to structural issues in crew operations.

And this was not primarily weather-driven.

It was linked to:

• Crew planning

• OCC performance

• Operational coordination

• Recovery processes

And here is the delicate point:

Many airlines rebuilt capacity faster than they rebuilt experience.

There are extremely junior teams making highly critical operational decisions.

In a complex airline operation…

that becomes extraordinarily expensive.

3. Operational buffers no longer exist

Before COVID:

• Airlines maintained spare aircraft

• Crew flexibility was greater

• Operational slack existed

Today:

• Fleets are fully utilised

• Aircraft deliveries are delayed by OEMs

• Engines remain grounded

• Costs are under severe pressure

Therefore: When something fails…

the disruption propagates immediately.

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CREW PLANNING AS STRATEGIC RISK – NICOLÁS

There is something the industry still does not fully want to acknowledge:

Crew Planning is no longer a support function.

Today it represents strategic risk management.

Because when airlines operate with:

• Weak systems

• Complex rules

• Stressed operations

• Limited senior talent

You no longer have inefficiency.

You have operational collapse risk.

And what we observed at Delta…

is probably an early warning signal of something larger.

Airlines today depend far more heavily on real-time execution.

And if that execution layer fails…

The entire network collapses.

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LOW-COST CARRIERS UNDER PRESSURE – ARTURO

Now let us move to the most fragile area of the system:

Low-cost carriers.

Spirit Airlines

Spirit has already collapsed and ceased operations.

The drivers were clear:

• Escalating costs

• Weak yields

• High fuel sensitivity

• Limited pricing power

The ultra-low-cost model performs extremely well in stable environments.

But under extreme volatility…

it struggles materially.

Wizz Air

The signal here is more sophisticated.

Wizz remains a strong airline.

However, the tone has clearly shifted.

We are now seeing:

• Greater financial focus

• Increased cash preservation

• Less hyper-growth narrative

That usually means:

The model is entering a defensive phase.

Volaris

And pressure is also becoming visible in Latin America.

Volaris is facing:

• Pratt & Whitney engine issues

• Fleet limitations

• Higher cost pressure

• Compromised utilisation

That is highly challenging for a low-cost model.

Because its core advantage is:

Simplicity combined with high utilisation.

Once that is lost…

Structural efficiency deteriorates.

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LATAM, AVIANCA AND FUEL PRESSURE – NICOLÁS

Now let us turn to Latin America.

Aeroméxico, LATAM and Avianca are probably better positioned than many pure lowcost carriers.

Why?

Because they benefit from:

• Greater international diversification

• Stronger corporate traffic mix

• More balanced networks

• Greater commercial flexibility

But even so…

fuel pressure is already affecting them materially.

Particularly in:

• Ultra-long-haul flying

• Atlantic operations

• Routes requiring significant diversions

And there is another critical factor:

Their revenue management capabilities are more sophisticated.

That helps.

But it does not eliminate the problem.

Additionally:

• A strong US dollar

• Higher airport costs

• Expensive leasing

• Elevated financing costs

Continue to place substantial pressure on the region.

Historically, Latin America survives crises better than many regions because it is accustomed to volatility.

But this time… the level of global operational tension is different.

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GLOBAL STRUCTURAL CHANGE – ARTURO

We are also witnessing a very interesting global reconfiguration.

Europe–Asia traffic is no longer flowing in the same way.

We are now seeing:

• More routes avoiding parts of the Gulf region

• More ultra-long-haul flying

• Greater point-to-point traffic

Who benefits?

• Turkish Airlines

• Air India

• IndiGo

Particularly India.

India is using this global transition to reposition itself as a major intercontinental aviation player.

And that could materially reshape the aviation map over the next decade.

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MEXICO AND THE REGULATORY FACTOR – ARTURO

Mexico is also entering a highly interesting phase.

There has recently been an important preliminary understanding between Mexican and US aviation authorities.

And that matters because:

The Mexico–United States bilateral aviation relationship is strategically critical for North America.

At the same time, Mexico continues to face structural challenges:

• Airport saturation

• Regulatory pressure

• Capacity limitations at AICM

• A complex transition towards AIFA

However, there is an interesting development.

Recent figures suggest that combined AICM and AIFA traffic is now approaching prepandemic levels.

That demonstrates something important:

Demand remains exceptionally resilient.

We are also seeing:

• Aeroméxico strengthening connectivity and long-haul capability

• Volaris adopting a far more defensive and financially disciplined posture

• Viva continuing to grow, albeit under cost pressure

The Mexican market is probably one of the hemisphere’s most sensitive markets due to its dependence on US transborder traffic.

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FINAL DEBATE – WHAT BREAKS FIRST? NICOLÁS

So the final question is: Where does the combination of these pressures hit hardest?

• Operational disruption?

• The low-cost model?

• Demand?

• OEMs?

• Or accelerated consolidation?

ARTURO

My view is:

Operations fail first.

Because they are already operating at the limit.

Then comes: Financial pressure on the weakest players.

And afterwards: Selective consolidation.

NICOLÁS

And I would add one more point.

We are going to see a very clear separation between:

• Airlines that know how to execute versus

• Airlines that only possess strategic narrative

Because today:

Strong execution is no longer simply a competitive advantage.

It is survival

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CLOSING – NICOLÁS

The industry is not collapsing today…

but it is clearly entering a phase of structural tension.

And complex systems do not fail uniformly.

They fail through their weakest points.

That is why today’s priorities are very clear:

• Strengthen operations

• Recover senior operational talent

• Improve resilience

• Maintain financial discipline

Because in this environment: Growth alone is no longer sufficient. Airlines must learn how to survive correctly.

This was Altitude. If you want to understand aviation beyond the headlines… this is your space.

See you in the next episode.