Boston Warwick works with airlines, airports and aviation investors on flight operations, fleet valuations and mergers and acquisitions. Each week we set out the aviation stories that matter to them, with the source and date for every figure.

Jet fuel costs pulled US airline guidance down this week. United, American and Southwest all reported record third-quarter revenue, yet each now assumes fourth-quarter jet fuel of between $4.55 and $4.80 a gallon, and American and Alaska Air Group expect full-year adjusted losses. In Europe, Ryanair says it is 85 per cent unhedged for 2027, while Wizz Air is 85 per cent hedged for the next six months. In Australia, Western Sydney International Airport opened to passengers on Sunday, and in Germany Lufthansa flew its last Airbus A340-600.

How jet fuel costs cut US airline guidance for the fourth quarter

United Airlines reported on 20 October 2026 that third-quarter revenue rose 17.4 per cent to a record $17.9bn, while fuel expense rose $1.8bn on the same quarter of 2025 at an average of $3.90 a gallon. It guided fourth-quarter adjusted earnings to $0.50 to $1.50 a share, assuming fuel at about $4.80 a gallon on the Gulf Coast jet forward curve of 16 October. United said analysts’ consensus assumed about $4.35 a gallon, and that the $0.45 gap is worth about $1.00 a share in the quarter.

American Airlines reported on 22 October revenue of $16.3bn, up 19.3 per cent, but fuel expense rose $1.9bn, or 67.5 per cent, at an average of $3.85 a gallon, and it made a GAAP net loss of $269m. It expects fourth-quarter fuel at about $4.70 a gallon, which it says is nearly double the price paid a year earlier, and an adjusted loss of $0.50 to $1.10 a share. For the full year it now expects an adjusted loss of $1.00 to $1.60 a share, and it said network growth in 2027 will slow from 2026 levels.

Southwest Airlines reported on 21 October record third-quarter revenue of $8.4bn, up 21.2 per cent, and adjusted earnings of $0.66 a share. Its fuel cost $3.92 a gallon, above the $3.70 to $3.75 it had assumed, and fuel expense rose $821m. It assumes about $4.55 a gallon for the fourth quarter and guides full-year adjusted earnings to $2.60 to $2.85 a share, which Reuters reported the same day as a cut to its profit forecast.

Alaska Air Group said on 20 October that its guidance assumes fourth-quarter fuel at $4.65 to $4.85 a gallon, $650m above its initial plan. It now expects a full-year adjusted loss of $5.00 to $5.50 a share, including $1.8bn of fuel expense above plan.

Jet fuel price per gallon, Q3 2026 actual and Q4 2026 assumed
AirlineQ3 2026 actual (US$ per gallon)Q4 2026 assumed (US$ per gallon)
United Airlines$3.90$4.80
American Airlines$3.85$4.70
Southwest Airlines$3.92$4.55
Jet fuel price per gallon paid in the third quarter of 2026 and assumed for the fourth quarter, by airline. Fourth-quarter figures are the airlines' own approximate assumptions from forward fuel curves in mid-October 2026.Source: United Airlines results and Investor Update, 20 October 2026; Southwest Airlines results, 21 October 2026; American Airlines results, 22 October 2026.

The guidance also changes growth plans. Southwest now expects full-year capacity growth of about 1.2 per cent, against its earlier guidance of about 1.5 per cent, and American will grow its network more slowly in 2027. For lessors placing aircraft with US airlines next year, slower growth means less demand for extra lift. United’s figures show how fast the outlook can move in either direction: every one cent change in the fuel price is worth about 2.5 cents a share in the quarter. Boston Warwick’s report The Capacity Airlines Actually Cut, part of The $159 Barrel series, compares what airlines said they would cut during this fuel spike with what they actually cut.

Ryanair and Wizz Air fuel hedging for 2027

Michael O’Leary, chief executive of Ryanair, told a press conference in Brussels on 20 October 2026 that European fares could rise “by 10, 15, maybe 20%” next year. “We’re 85% unhedged next year, and most of the other European airlines are in a similar position,” he said, as reported by Euronews on 21 October. He told Euronews that Ryanair had locked in fuel at about $67 a barrel this year. Euronews cited IATA’s monitor putting jet fuel in Europe and the CIS at an average of $207.61 a barrel in the week to 16 October, up almost 128 per cent on a year earlier.

Wizz Air sits at the other end. Chief executive József Váradi told Routes World 2026 in Frankfurt that Wizz is 85 per cent hedged for the next six months at $800 a metric tonne, against a spot price of about $1,500, and 50 per cent hedged for summer 2027 at $900 a tonne, Aviation Week reported on 22 October. “I’m actually paying half the fuel price versus some of the guys who are completely naked and have no hedge protection,” he said. He accepted that if the Middle East conflict stopped and fuel prices collapsed, Wizz “may have to pay a premium”.

Share of jet fuel hedged: Ryanair and Wizz Air
Airline and periodShare of fuel hedgedHedge price
Ryanair, 202715% (stated as "85% unhedged")Not stated
Wizz Air, next six months85%$800 a tonne
Wizz Air, summer 202750%$900 a tonne
Ryanair says it is 85 per cent unhedged for 2027. Wizz Air is 85 per cent hedged for the next six months at $800 a tonne, against a spot price of about $1,500, and 50 per cent hedged for summer 2027 at $900 a tonne. The periods differ by airline.Source: Euronews, 21 October 2026 (Michael O'Leary, 20 October); Aviation Week, 22 October 2026 (József Váradi, Routes World 2026).

At the same Brussels event, Ryanair said it was taking six aircraft, which it valued at a $600m investment, 1.1m seats and 20 routes out of its winter 2026 schedule at Brussels South Charleroi Airport, Belgium (CRL/EBCI) and Brussels Airport, Belgium (BRU/EBBR). It blamed Belgium’s aviation tax, which rises from €2 to €7 in January 2027. If fuel stays high into 2027, unhedged airlines will have to raise fares or cut seats. Váradi expects exactly that: “Everyone else is going to shrink and increase fares,” he told the conference.

Western Sydney International Airport opens to passengers

Western Sydney International (Nancy-Bird Walton) Airport, Australia (WSI/YSWS) opened to passengers on Sunday 25 October 2026. Its first commercial passenger flight was Jetstar JQ362 to Gold Coast Airport, Australia (OOL/YBCG), ABC News reported. The airport sits at Badgerys Creek, 45 kilometres from Sydney’s central business district, and operates 24 hours a day, unlike Sydney Kingsford Smith Airport, Australia (SYD/YSSY), which has an overnight curfew. Freight flights started in July.

The Australian government said on 10 June 2026 that the airport will serve up to 10 million passengers a year at first. It said that from launch Jetstar would operate up to 14 flights a week to Melbourne, four to the Gold Coast and three to Brisbane, that Air New Zealand would start flights to Auckland on 26 October and Singapore Airlines daily flights to Singapore Changi on 23 November, and that Qantas would follow on 28 March 2027 with QantasLink Embraer E190s. The government set 1 November 2026 as the intended date for the airport to open for night movements, which will stop the freight flights currently permitted at Kingsford Smith during its curfew.

WSI chief executive Simon Hickey told ABC News the airport expects to get close to 10 million passengers a year by the early to mid 2030s, and that more terminals and a second runway could take it to 82 million a year in the 2060s. For airlines, the lack of a curfew is the main attraction, since it allows arrival and departure times that Kingsford Smith cannot offer for long-haul flights from Asia and the Gulf.

Lufthansa retires its last Airbus A340-600

Lufthansa flight LH419 from Washington Dulles International Airport, United States (IAD/KIAD) landed at Frankfurt Airport, Germany (FRA/EDDF) on Monday 19 October 2026, the airline’s last scheduled commercial flight with the Airbus A340-600, Lufthansa said. The aircraft, registered D-AIHW, carried 267 passengers and 15 crew. Lufthansa took delivery of its first A340-600 on 25 November 2003 and operated 24 of the type in all.

Lufthansa said the A340-300, the A330-200 and the Boeing 747-400 will also leave the fleet by 2027, to be replaced by the Airbus A350-1000 and Boeing 777-9. It has 18 Boeing 787-9s in service, with 11 more due by 2027, and expects 70 per cent of its long-haul fleet to be next-generation aircraft by 2028. Francesco Sciortino, the Lufthansa Airlines board member who captained the final flight, said the airline expects the A350-1000 and further 787s “very soon” and the 777-9 next year. Portugal also chose Lufthansa this month to buy up to 49.9 per cent of TAP Air Portugal, as Boston Warwick reported in last week’s briefing.

FAA orders Boeing 737NG horizontal stabiliser checks

The US Federal Aviation Administration published airworthiness directive 2026-20-14 in the Federal Register on 19 October 2026. It requires operators of certain Boeing 737-600, -700, -700C, -800, -900 and -900ER aircraft to measure excess play in the horizontal stabiliser pivot hinges and jackscrew, then repair or replace worn parts where needed. The FAA said multiple operators had reported pitch oscillation events, and that the condition, if not addressed, could lead to flutter and loss of control. The directive takes effect on 23 November 2026 and the FAA estimates it affects 1,987 US-registered aircraft. It does not apply to the 737 MAX, whose largest version, the 737-10, the FAA certified on 20 October, as Boston Warwick reported on 22 October.

The FAA puts the measurement at six work-hours, or $510 an aircraft, about $1.01m across the US fleet, and says it cannot estimate how many aircraft will need repairs or new parts. The check costs little. For lessors and buyers of mid-life 737NGs, the open question is which aircraft need parts, and that will show in maintenance records at lease return and in pre-purchase inspections.

DAE completes United Airlines 737-9 sale and leaseback

Dubai Aerospace Enterprise (DAE) said on 21 October 2026 that it had delivered the tenth and final Boeing 737-9 to United Airlines under a sale and leaseback signed earlier in 2026, carried out with Equator and Mustang, with DAE Capital as servicer. DAE said the deal took three months from signing the documents to completion, and that it now has 26 Boeing 737 and Airbus A320 family aircraft on lease to United. No price was disclosed.

Sale and leaseback lets an airline raise cash against new aircraft while keeping them in service. Southwest booked a $118m gain from sale and leaseback transactions in the third quarter, its 21 October results show.

What to watch next week

Boeing reports third-quarter results on Tuesday 27 October. Air New Zealand flies the first international service from Western Sydney on 26 October, and the airport’s intended date for night movements is 1 November. The FAA’s 737NG stabiliser directive takes effect on 23 November. For airlines in Europe, the question is how many follow Ryanair in cutting seats before the 2027 hedging gap arrives.

Boston Warwick advises airlines, lessors and investors on fleet valuations and transactions. To discuss what this week’s stories mean for your fleet or portfolio, contact Boston Warwick.

Sources