APAC Focus: Asian Airline Sector "UBS Evidence Lab inside: From short-te..."

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APAC Focus: Asian Airline Sector "UBS Evidence Lab inside: From short-te..."

Powered by Lab Global17 JuneResearch2026ab Evidence UBS YES

Asian Airline Sector Equities

Asia PacificAPAC Focus: From short-term pain to long-

term strengthPlease Airlines

Perry Yeung

Analyst

perry.yeung@ubs.com

+852-2971 6349

Hazel Tan, PhD

Associate Analyst

hazel.tan@ubs.com

+852-3712 3058

Tommaso Aquilante

Strategist

tommaso.aquilante@ubs.com

+44-20-7567 1205 Higherfuel prices since the Middle East (ME) conflict are weighing on near-term Angus Chan

earnings, but the narrative is shifting as the US and Iran reach an agreement. Analyst

angus.chan@ubs.com Airlines best able to navigate the cost pressure are likely to outperform peers in the

+852-2971 7530

long term, as airfares could remain elevated, driven by accelerating price discovery

in which demand proved to be relatively inelastic; tighter supply as airlines expedite Samuel Yip

the retirement of old aircraft; and, to a lesser extent, traffic share gains from Gulf Associate Analyst

samuel.yip@ubs.com carriers on European routes. Our six-pillar scorecard ranking airlines' near- and

+852-3712 2727

long-term positioning highlights Cathay, Thai and Qantas as likely outperformers.

Ryan Lau

Near-term headwinds amid the ME conflict, but the narrative is shifting ryan-za.lau@ubs.com

The ME conflict has led to a surge in jet fuel prices, weighing on near-term earnings, as +852-2971 7954

fuel is typically the largest cost component, accounting for about 30% of airlines' opex.

Xin Chen

In response, airlines are raising airfares at the expense of potential demand attrition, Analyst

with trade-off dictated by the elasticity of flight demand. In collaboration with UBS's S1460511050002