Global – AFM Managing Director Maximilian Buerger has shared an industry outlook highlighting how projected oil market dynamics could materially influence airline economics and pilot demand over the next several years, particularly from the second half of 2026.

• The International Energy Agency (IEA) projects a structural global oil surplus approaching 4 million barrels per day in the second half of the decade, a scenario that could place sustained downward pressure on oil prices.

• If additional supply materialises, including a potential 1.5 million barrels per day from Venezuela, oil prices could remain below USD 60 per barrel for an extended period.

• Fuel costs typically account for approximately 25% of operating costs for full-service carriers and up to 40% for low-cost carriers, making oil price movements a critical driver of airline profitability and capacity decisions.

• Historical data from the past 25 years indicates that a decline from USD 80 to USD 55 per barrel has previously driven a 15–20% uplift in airline operating margins, fundamentally altering route economics.

• At sub-USD 60 oil prices, narrowbody aircraft break-even load factors can fall from above 80% to the high-60% range, improving the viability of additional frequencies, thinner routes, and extended operation of older aircraft types.

• Similar dynamics were observed during the 2015–2016 oil downturn, when US airlines expanded capacity at the fastest pace in a decade outside of post-pandemic recovery.

• From a pilot training and labour perspective, lower fuel prices typically accelerate Available Seat Mile (ASM) growth and route density, directly increasing flight crew requirements.

• Airlines are also more likely to retain older aircraft in active service when fuel prices are low, supporting higher pilot utilisation and delaying fleet retirements.

• Combined with rising aircraft delivery rates from OEMs, these factors could contribute to renewed pilot demand growth beginning in the second half of 2026.

Statement

• “If the projected global oil surplus materialises while aircraft OEMs significantly increase deliveries, we could potentially see a scenario of strongly growing pilot demand starting in the second half of 2026,” said Maximilian Buerger, Managing Director at AFM.

Source: AFM