Headwinds ahead: constrained capacity in the US, softer prices for European airline

In its airline industry outlook, JP Morgan said the aviation industry could face several headwinds in the coming months despite a robust summer demand for air travel. For instance, US carriers are contending with capacity constraints, with domestic capacity growth expected to be only around 3.5% in the second half of the year. However, transatlantic travel remains strong with European destinations still seeing strong demand from US travellers, further bolstered by a strong US dollar. “Our prevailing thesis is that premium and international demand for air travel remain in the lead,” said JP Morgan US airline and aircraft leasing equity