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Demand for commercial aftermarket services will remain strong so long as demand doesn’t collapse and older, maintenance-hungry aircraft remain more valuable in service than as part-out candidates.
The Middle East conflict could prompt such changes, but only if its duration stretches into months.
“We believe the conflict in the Middle East is a watch item and poses a risk to global travel, but we do not see a meaningful impact on the MRO industry in the short term,” RBC Capital Markets analyst Ken Herbert wrote in a March 2 analyst note. “The potential impact on crude pricing is also a significant watch item (higher fuel is a headwind for [aftermarket] spending).”
Herbert’s comments came on the heels of steady January global traffic numbers from IATA that included 3.8% uptick in revenue passenger kilometers on a 3.5% increase in capacity, or available seat kilometers (ASKs).
The near-term capacity outlook was rosier. March schedules included 5.2% more seats than in March 2025.
But Feb. 28’s start of the ongoing Middle East conflict has changed things. Carriers based in the Middle East have largely stopped all flying, while airlines that serve the region have halted service. The related airspace closures are forcing other airlines to make changes.
Fuel prices have spiked. The Argus U.S. Jet Fuel Index reported an average price of $3.24 per gallon in four major hub markets—Chicago, Houston, Los Angeles, and New York. The figure is 30% or 74 cents, higher than on Feb. 27.
Sustained fuel prices at that level would likely be enough to trigger fleet changes, starting with retirements of older aircraft.
A Swelbar-Zhong Consultancy analysis for Aviation Week underscores how sensitive U.S. carriers are to fuel price swings.
American Airlines’ full-year 2025 pre-tax earnings would have been zeroed out if its average fuel cost was just $.05 higher. At Southwest Airlines, the break-even figure was another $0.26 per gallon. Delta Air Lines ($1.50) and United Airlines ($0.92) had more margin, but the figures highlight how higher fuel costs alone could lead to strategic fleet shifts.
“Other than Delta and United, the industry will struggle to grow if the war is prolonged,” Swelbar told Aviation Week. “The value airline sector—Frontier [Airlines] specifically and Breeze [Airways] as well—could find the fuel environment too onerous to carry out planned growth in 2026.”
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