Airport Experience® News - Pre-Conference Issue 2026

AIRLINES

Meghna Maharishi, airlines reporter at Skift , said the premium segment has also been buoyed by favorable fuel prices and spending behavior among high-income travelers. “Cheap fuel and strong premium demand have made 2025 a rebound year for airlines,” she says. “We have seen a bifurcated economy where wealthier travelers are resilient to economic shocks and their spending is propping up profits.” Maharishi said loyalty programs are also playing a growing role in how airlines plan routes. “ Delta said its deal with American Express now influences which markets it enters,” she says. ULCC Struggles The premium segment continues to perform well, but the outlook is more complicated for ULCCs. Several analysts said ultra-low-cost carriers are facing pressure from rising labor costs, weaker demand in the economy segment and limited access to higher-margin revenue opportunities. “The big reason is that costs have increased for all airlines,” Bilous says. “There is really not a cost advantage that they have previously enjoyed. Labor is more expensive and they do not have meaningful shares of revenues of higher margin than basic economy. They also have less international exposure.” Maharishi says economy-class demand has weakened globally and low-fare carriers have been hit hardest because economy travelers are pulling back on spending. That trend is especially visible in Europe and among U.S. carriers focused on price-sensitive customers. Shabat said the low-cost segment continues

to face serious challenges. “ Southwest, JetBlue, Frontier and Spirit are still struggling,” he says. “They have all undertaken very big turnaround efforts.” Spirit Airlines remains under bankruptcy protection and is widely seen as a potential target for acquisition. “Everyone is watching Spirit,” Shabat notes. “The question is who if anyone will buy them.” Harteveldt adds that there is growing speculation that Frontier won’t merge with Spirit but will instead acquire some of its aircraft and facility leases. “Perhaps they could make offers for pilots, mechanics and flight attendants,” he suggests. “That way it would be less expensive and faster for Frontier to realize the benefits.” He also points to Alaska Airlines and its pending merger with Hawaiian Airlines which is expected to close sometime in 2026. While major airline mergers may be less likely in the short term, observers agree that consolidation remains a long-term trend in the industry. Airport Impact Maharishi says international travel has also been affected by policy uncertainty and geopolitical tensions. “Tariff shocks caused consumers to pull back spending and business travel came to a halt after it had started rebounding,” she says, adding that US immigration policies have created uncertainty and some carriers have seen dips in inbound travel. Harteveldt cites a notable decline in Canadian visitors as one regional trend affecting many airports in Florida, Arizona, southern California and Las Vegas. At the same time, business travel continues to make a slow recovery. Harteveldt says that before the Covid-19 pandemic, business travelers made up 45% of passengers and accounted for 55% of profits. Today those figures are closer to 37% of travelers and 45% of profits. “Business travel will probably never return to levels seen before the pandemic,” Harteveldt says. “Businesses looked at the money they saved from employees traveling less. Using Zoom instead helped them save money. The business people are happy about that.” Maharishi says any business travel rebound is being led by sectors less sensitive to travel cuts. The recent 44-day government shutdown caused a sharp drop in business travel among government-adjacent industries, she notes, but other sectors are perking up. Despite that slow recovery, Shabat remains optimistic about the segments that are growing. “Professional services and tech

Above: Henry Harteveldt, travel industry analyst and advisor for Atmosphere Research Group, says travel is now concentrated among households earning $150,000 or more, while fewer Americans earning under $100,000 are flying compared to previous years.

have been fueling much of the business travel recovery,” he says, adding that the hottest market in the U.S. right now is Nashville. 2026 Outlook With 2026 underway, experts are aligned on one thing. It will not be a record-breaking year, but should continue the recovery and recalibration seen since 2022. Maharishi calls it a wait-and-watch year because economic instability is still present. For airports that means staying nimble. Infrastructure priorities from lounge expansion to gate allocation are being shaped by shifting airline strategies. Premium travel is expanding the parameters of what economy passengers are willing to pay for. Airlines are adjusting route maps based on loyalty partnerships, passenger income and international relations. Capacity constraints will continue to influence where airlines can grow and how airports support them. Willie Walsh , director general of the International Air Transport Association , adds a global perspective on these challenges. “We’ve estimated that the cost of the supply chain disruption for the industry in 2025 has been $11 billion as a result of the delayed delivery of new aircraft and increasing maintenance costs,” he says. “So that will continue into 2026 and probably 2027 as well.” Still, analysts believe the foundation for long term growth remains solid. Premium demand is strong, loyalty programs are delivering results and travel continues to be a priority for consumers with spending power. While the year may not bring dramatic change, it is positioned to keep the industry on a steady upward path.

Above: Jarrett Bilous, airlines managing director at S&P Global Ratings, says the momentum in the market is centered on premium offerings, with the focus on access to lounges, more legroom and more value-added services compared to basic economy.

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AX NEWS FEBRUARY 2026