Geopolitical easing and lower fuel prices boost airline expectations, with sustained winter demand as a key variable

(1) Bernstein analysts pointed out in their report that European airlines may still face downward pressure on consumer confidence and travel demand from inflation and broader economic uncertainty in the second half of the year. However, improvements in geopolitical conditions and falling fuel prices have strengthened the outlook for the aviation industry. (2) Passenger demand remains resilient, allowing most airlines to maintain their summer capacity plans. Analysts believe the core issue is whether this demand strength can continue into the off-season after the peak travel period. (3) Lower fuel costs may reduce the necessity for airlines to cut capacity in the winter, which will support passenger flow and benefit airport operations, creating a positive transmission effect across the industry. (4) Going forward, the key focus will be on the recovery progress of corporate travel demand and whether actual consumer purchasing power will be affected by secondary shocks from energy price fluctuations. These factors will gradually become apparent during the autumn travel booking window and will determine whether the recovery in airline valuations can be sustained through the end of the year.