Editor's Note
As commercial aviation approaches 2027, the sector faces an uncompromising reality check. From $1,600-per-tonne Jet A1 and ongoing engine turnaround bottlenecks to feedstock scrutiny under European SAF mandates, low-cost and regional carriers cannot simply pass cost increases to price-sensitive passengers.
In this exclusive series, LCRAB bypasses executive PR to bring you unvarnished intelligence from the frontline. Over the coming weeks, sector leaders, asset managers, and MRO specialists outline the structural choices, secondary material strategies, and fleet decisions required to survive the squeeze ahead.
What do you see as the single biggest challenge for low-cost and/or regional operators in 2027 and how are you preparing for it?
Low-cost carriers operate in a market where passengers are extremely price-sensitive and have limited budgets. However, Jet A1 prices have surged from around $650 to $1,600 per tonne. Airlines simply cannot pass these additional costs on to their customers without pushing fares beyond what many passengers can afford. Trains, buses and even ferries are becoming more attractive alternatives for travellers who have little choice but to stay within their budgets.
If we look at the first victims of the oil crisis, in some cases compounded by recurring engine issues, they are almost all low-cost carriers: airBaltic, Volotea and Animawings, while AirAsia is also under close scrutiny.
This demonstrates that fuel prices and engine supply-chain constraints will remain the number one challenges, followed closely by the geopolitical situation in the Middle East, which directly affects both oil prices and air routes across the region.
The immediate consequence for airlines is, of course, pressure on their cash positions. Entering a crisis with limited liquidity is hardly an ideal situation, and it requires immediate action, as we have seen with Volotea and airBaltic.
And what about MRO? Interestingly, we are experiencing almost the opposite effect! Lessors are increasingly approaching us for aircraft storage, transition checks and teardown services. We are entering a particularly busy period.
Where do you see the most significant growth opportunities, whether in markets, routes, business models or partnerships?
We have seen continued consolidation in European aviation. There are virtually no major national flag carriers left to acquire.
Meanwhile, wherever airlines face financial difficulties, competitors are positioning themselves to take over the most profitable routes. This is precisely what we are seeing with easyJet looking at routes discontinued by Volotea.
Unfortunately, we can also expect some of the less profitable routes to disappear altogether, particularly in the European regional aviation market.
How do you expect aircraft and engine availability, delivery delays and MRO capacity to shape the sector next year?
Aircraft storage and transition activity should increase over the next two years. At the same time, aircraft manufacturers are ramping up narrowbody production, targeting rates of up to 72 aircraft per month. This should translate into more older aircraft heading into storage or, ultimately, to the scrapyard.
Aircraft disassembly will therefore increase, improving the availability of engines and Used Serviceable Material (USM). Airlines facing tighter cash positions will benefit from this additional supply.
I therefore see significant opportunities for MRO providers specialising in aircraft transitions and teardown activities, as well as for USM specialists. More importantly, this should offer airlines substantial opportunities to reduce their maintenance costs.
With around 40% of CFM56-5B/7B engines reportedly yet to undergo their first shop visit, there is considerable potential to develop alternative solutions to reduce overhaul costs. Specialists such as CFM Materials, AAR, FTAI, GA Telesis, AerFin, AJW, Avtrade and, of course, Vallair Asset Solutions should all benefit from increased USM activity.
However, this will not solve one of the industry's most persistent problems: the shortage of skilled and qualified technicians. This remains a major obstacle to expanding MRO capacity and developing additional hangar facilities.
What impact will sustainability requirements, including SAF mandates and emissions schemes, have on costs and strategy?
I have a very personal view on this subject.
Yes, we MUST reduce emissions. But not by killing the industry or creating other environmental disasters in the process.
We have seen serious concerns and documented investigations into fraud involving Used Cooking Oil (UCO), including virgin palm oil potentially being disguised as waste-based feedstock. And we all know the devastating impact that palm oil production can have on deforestation and biodiversity.
This is not just speculation. In Malaysia, Reuters reported in February 2025 that the government was tightening controls on UCO exports amid concerns that shipments labelled as used cooking oil could actually contain virgin vegetable oil. The Malaysian authorities themselves acknowledged the need for stronger traceability and enforcement.
Even more concerning, in March 2026, Indonesian authorities arrested and charged 11 suspects, including three customs and government officials, in connection with the alleged illegal export of crude palm oil falsely declared as Palm Oil Mill Effluent (POME), a waste product eligible for use in advanced biofuels. The investigation involved hundreds of millions of euros in exports and raised serious questions about the integrity of feedstock supply chains serving European biofuel producers.
The European Commission also investigated allegations involving Chinese biodiesel imports. Although it did not establish fraud, the investigation exposed systemic weaknesses in certification audits.
So, my question is simple: are we genuinely reducing emissions, or are we sometimes simply relocating environmental damage elsewhere in the world?
And SAF remains significantly more expensive than conventional Jet A1.
We are therefore imposing additional constraints on airlines that are already heavily taxed in certain countries. Additional emissions schemes and sustainability obligations may well become further nails in the coffin for airlines already struggling financially.
Environmental responsibility is essential. But it must deliver genuine environmental benefits, with proper traceability and economic realism. Otherwise, we risk damaging an entire industry while achieving very little for the planet.
Which technologies or digital developments do you expect to make the biggest difference to efficiency or the passenger experience?
Everybody talks about AI, and it is becoming increasingly present in our professional lives. It is fast, constantly learning and adapting, and capable of identifying the right information within mountains of data.
Its impact on predictive maintenance is already significant, as is its potential for image analysis in MRO, enabling faster and more accurate diagnostics. We can draw an interesting parallel with developments in the medical industry, where similar technologies are transforming diagnostic capabilities.
From a passenger experience perspective, I see two major impacts.
The first is AI's ability to anticipate customer needs, improve targeted advertising and develop more personalised marketing and ancillary products.
The second is a renewed focus by airlines on attracting passengers through a pristine, highly personalised customer experience.
We have already seen this with Air France and its La Première product. It is no longer simply about a seat and onboard service. It is a complete passenger experience that can begin at home with a limousine pickup, followed by exclusive check-in, seamless security and immigration procedures, and an experience entirely separated from other passengers, ensuring maximum privacy.
This ultra-premium experience can command very high fares, whereas business class may increasingly combine enhanced customer service with more aggressive price competition, potentially benefiting airlines through better market segmentation.
Of course, not all low-cost carriers offer premium services. However, AI can significantly improve the development and personalisation of ancillary products, creating additional revenue opportunities and becoming a genuine differentiator in attracting and retaining customers.
Is there anything else you believe the industry is underestimating heading into 2027?
I can see several major concerns:
a – The duration of high Jet A1 prices. Sustained high fuel costs will undoubtedly have a significant impact on the industry, and I am not convinced that everyone has fully taken this risk into consideration.
b – The geopolitical situation. Trump, Putin, Zelenskyy, and the often unspoken confrontation between Shia and Sunni interests in the Middle East. The conflict involving the Houthis and Saudi Arabia also has a religious dimension, alongside its political and strategic implications. These tensions can have profound consequences for aviation, fuel prices and international trade.
c – Increasing aircraft production at a time when airlines may face severe cash constraints. This could create a reverse effect, particularly in the narrowbody market, with more aircraft becoming available than airlines can financially absorb. Such adjustments would inevitably affect the entire OEM supply chain, potentially putting many smaller suppliers at risk.
d – The political and economic situation in Europe, particularly in France. A Greek-style sovereign debt crisis in a major European economy would have an impact comparable to a magnitude 9 earthquake, with consequences extending far beyond the aviation sector.
e – The climate crisis. Climate change will increasingly translate into migration pressures, energy crises and major economic and social disruptions, all of which will ultimately affect our industry.
I remain an eternal optimist. But we had better start taking these risks very seriously and implement concrete measures to address them. What we need is action, not just words, good intentions or misguided policies.
