Global Aviation in 2026: Moderate Growth, Strategic Deals, and Sustainability Bets
January 8, 2026·3 min
The episode opens by outlining the state of global aviation entering 2026, characterized by moderate growth, higher input costs, and a wave of strategic deals and technology investments. On the demand side, IATA data from November 2025 shows air cargo volumes up 5.5% year-on-year, supported by a 2% rise in global goods trade and increased manufacturing sentiment. However, Europe's intra-regional flows have declined for four months, down 4.9%, indicating a shift toward Asia-Pacific and long-haul corridors. Jet fuel prices rose 5.9% in November despite softer crude oil prices, driven by refinery disruptions, EU restrictions on Russian products, and tight capacity pushing crack spreads to nearly double last year's levels. Airlines are responding with aggressive fleet renewal and new aircraft orders. A key example is Alaska Airlines' record order for 105 Boeing 737-10s, announced on January 7, with options for 35 more and five additional 787s. This order takes Alaska's 737 MAX backlog to 174 jets and its 787 order book to 12 aircraft, locking in delivery slots through 2035 and supporting plans to expand routes, including to Alaska. The move follows Alaska's 2024 acquisition of Hawaiian Airlines and signals confidence in long-term U.S. demand despite near-term cost pressures. On the finance and supply side, a sale and leaseback of six new Pratt & Whitney PW1900 engines between Porter Airlines and Botech highlights continuing tightness in next-generation narrowbody engines. It also reflects growing confidence in the Embraer E2 platform as operational capabilities improve. The episode provides a data-driven analysis of current trends, focusing on specific metrics like PMI levels and crack spreads. It emphasizes the interplay between regional demand shifts, cost factors, and strategic industry responses. The discussion of Alaska Airlines' order illustrates how major carriers are securing future capacity amid market uncertainties. The mention of the Porter Airlines-Botech deal underscores supply chain challenges in the aviation sector. Overall, the episode offers a comprehensive overview of key developments shaping aviation in the near term, blending statistical insights with real-world examples of corporate strategies and market dynamics.
