Oil’s new normal undercuts jet maintenance boom
GE•Oil prices above $100 a barrel and jet fuel prices more than double last year’s average are pressuring airline costs, threatening demand for maintenance and spare parts. IATA cut its 2026 passenger traffic growth forecast to 2.1% from 4.9%.
1. Fuel costs pressure airlines
High oil and jet fuel costs are squeezing airlines, including Spirit, which ceased operations, and Ryanair, which is cutting flights. Airlines’ ability and willingness to pay for maintenance and spare parts could weaken as profitability comes under pressure.
2. Maintenance demand shows cracks
Lufthansa CEO Carsten Spohr said customers were delaying major “heavy check” refits, while Citi analysts cited airlines’ growing preference for shorter-term, targeted maintenance over full overhauls. Engine specialists still have extensive work backlogs, and airlines may hesitate to give up maintenance slots or retire aircraft.
3. Valuations add risk
Long-haul flying is benefiting from limited aircraft supply and airlines’ ability to pass on fare increases, shielding Rolls-Royce in particular and, to some extent, GE Aerospace. Before a recent selloff, GE traded around 45 times forward earnings; Rolls-Royce and Safran were above their 10-year average enterprise value to forward operating profit multiples, excluding the pandemic years.
