Airlines: The airline industry has largely completed its post-pandemic recovery, with passenger demand returning to a more normalized growth trajectory. But after reaching record levels in 2025, global traffic has softened in 2026 amid weaker economic growth and heightened geopolitical uncertainty. Industry-wide revenue passenger kilometers (RPK) declined by -1.7% y/y in June (after a -2.2% decline recorded in May), while the passenger load factor (PLF) remained resilient at 84.2%, reflecting disciplined capacity management despite softer demand. Air cargo has followed a similar trend, with demand remaining above pre-pandemic levels but expanding at a more moderate pace.
The industry's main challenge in 2026 has been the escalation of geopolitical tensions in the Middle East. Airspace closures and security concerns have disrupted one of the world's most important aviation hubs, forcing airlines to reroute flights between Europe and Asia, increasing flight times, fuel burn and operating costs while weighing on regional tourism. Middle Eastern carriers have been the most affected, with passenger traffic remaining around 14% below last year's levels despite a gradual recovery since the peak of the disruptions. Although global capacity is expected to resume modest growth during the last quarter of 2026, airlines are likely to remain highly exposed to further geopolitical developments.
Profitability is also being squeezed by record jet-fuel prices, which have become the industry's most important margin headwind. Unlike crude oil, kerosene prices have surged due to elevated refining margins and disruptions to Middle Eastern fuel supply chains, with fuel accounting for roughly 30% of airlines' operating costs. The impact varies across regions: most US airlines remain largely unhedged against fuel prices but have partly offset higher costs through strong travel demand associated with the FIFA World Cup, while European carriers entered the year with stronger fuel hedges but remain more exposed to disruptions in Middle Eastern jet-fuel supplies and longer flight routings around restricted airspace. Combined with higher labor, maintenance and airport costs, airlines are expected to operate in a structurally higher-cost environment than before the pandemic.
Looking ahead, we expect industry revenues and passenger demand to continue growing at a modest pace through the remainder of 2026 and into 2027, broadly in line with global economic activity. Profitability should gradually improve as aircraft deliveries recover and geopolitical disruptions ease, although margins are likely to remain below historical peaks given persistently high operating costs, the ongoing transition toward sustainable aviation fuels and continued uncertainty surrounding global fuel markets.
Maritime: Maritime shipping has transitioned from a relatively predictable backbone of global trade into a structurally more volatile and risk-exposed industry. Geopolitical tensions, trade fragmentation, climate-related disruptions and increasing regulation are reshaping global shipping routes and raising operating complexity. The Red Sea crisis remains the clearest example: continued security risks around the Bab el-Mandeb Strait have forced many carriers to reroute vessels around the Cape of Good Hope, extending voyages by approximately 35–45%, increasing fuel consumption, insurance costs and fleet requirements. More recently, tensions around the Strait of Hormuz have reinforced concerns about the vulnerability of strategic maritime chokepoints, particularly given its importance for global oil and LNG flows.
Freight rates have normalized significantly from the exceptional levels observed during the 2021–2022 supply chain crisis, when container prices reached peaks of around USD15,000 per FEU on certain routes. However, volatility remains structurally higher than before the pandemic due to recurring disruptions, shifting trade patterns (the US tariffs war in 2025 lifted rates up) and uncertainty around global supply chains. In addition, the large wave of vessel orders placed during the post-pandemic boom is now increasing available capacity, creating a risk of overcapacity.
At the same time, the industry is entering a long-term investment cycle driven by fleet renewal and decarbonization needs. Stricter environmental regulations, carbon pricing mechanisms and the need to replace an aging global fleet are accelerating demand for new vessels and alternative fuels. While this creates opportunities for operators with modern, efficient fleets, it also represents a significant financial challenge given the high cost of new ships and uncertainty around future fuel technologies.
Looking ahead to 2027, maritime transportation is expected to remain essential for global trade but operate under a “new normal” characterized by higher volatility, greater capital intensity and increased geopolitical exposure. Profitability is likely to remain under pressure as fleet capacity expands and bunker fuel costs stay elevated due to continued uncertainty around Middle Eastern energy flows. Higher fuel expenses, longer sailing routes caused by geopolitical disruptions and increasing decarbonization requirements will continue to weigh on margins, particularly for operators with older and less efficient fleets. However, companies with strong balance sheets, modern vessels, diversified networks and early positioning in low-carbon technologies should be better positioned to outperform in an increasingly complex operating environment.
Rail: Rail transport continues to strengthen its strategic position as governments increasingly prioritize low-carbon and energy-efficient mobility. Across Europe, public investment remains focused on expanding high-speed rail, modernizing existing networks and improving cross-border connectivity through projects such as the Trans-European Transport Network (TEN-T). At the same time, the gradual liberalization of passenger rail markets is increasing competition, encouraging service innovation and improving operational efficiency, particularly on high-demand intercity routes.
Compared with other transport modes, rail has been relatively insulated from the sharp increase in fuel prices during 2026. The widespread electrification of European rail networks has reduced direct exposure to oil markets, making rail an increasingly attractive alternative for both passengers and freight as airlines and road operators face higher fuel costs. At the same time, rail continues to benefit from governments' decarbonization strategies, with subsidies and public funding supporting network expansion, fleet modernization and electrification. Looking ahead, we expect rail to continue gaining market share on short- and medium-distance corridors, supported by environmental policies, sustained public investment and growing demand for sustainable mobility. The main challenges remain infrastructure capacity constraints, aging networks in several countries and the need to accelerate digitalization and signaling upgrades. Overall, rail is likely to remain one of the transportation sector's most resilient segments through 2027.
Road: Road transportation continues to benefit from sustained government investment in infrastructure, particularly in developed markets where modern road networks are viewed as strategic assets for strengthening economic competitiveness and supply-chain resilience. Major initiatives such as the EU's TEN-T programme and the US Infrastructure Investment and Jobs Act are expected to support freight activity and passenger mobility through 2027, while inadequate infrastructure remains a structural constraint across many emerging economies.
The sector's main challenge in 2026 has been the sharp increase in diesel prices following the escalation of the conflict in the Middle East. As most road transport operators have limited fuel-hedging capabilities, higher fuel costs have translated rapidly into margin pressure, with only partial recovery through fuel surcharges in competitive freight markets. At the same time, governments continue to accelerate fleet electrification through subsidies and charging infrastructure investments, although high vehicle costs and insufficient charging networks remain key barriers for heavy-duty transport. Looking ahead, we expect the sector to deliver modest growth through 2027, supported by infrastructure spending and resilient freight demand. However, profitability will remain closely linked to fuel-price volatility and the pace of the transition toward low-emission transport.
