Air passenger demand falls in May as Middle East war weighs on traffic

Global passenger demand fell 2.2 per cent year-on-year in May, as the war in the Middle East continued to disrupt air travel, although demand outside the region remained positive, according to the International Air Transport Association (IATA). Total demand, measured in revenue passenger kilometres (RPK), declined compared with May 2025, while capacity, measured in available seat kilometres (ASK), fell 2.3 per cent. Despite the drop in traffic, the global passenger load factor edged up by 0.1 percentage points to 83.5 per cent, marking a record high for the month of May. IATA said the headline figure was heavily affected by the Middle East. Excluding the region, total passenger demand grew by 0.7 per cent. International demand fell 1.6 per cent year-on-year, while capacity declined 2.4 per cent. Nevertheless, the international load factor rose 0.7 percentage points to 83.7 per cent. Excluding the Middle East, international demand was up 3.1 per cent. Domestic demand was weaker, falling 3.1 per cent compared with May 2025, as capacity dropped 2.1 per cent. As a result, the domestic load factor slipped 0.8 percentage points to 83 per cent. IATA director general Willie Walsh said passenger demand had fallen “on the impact of war in the Middle East”, with the decline concentrated among carriers in the region. Middle Eastern airlines recorded a 28.4 per cent year-on-year fall in total passenger demand in May, although Walsh said this was a significant improvement from the 46.6 per cent drop seen in April. “That’s a significant improvement on the 46.6 per cent decline recorded for April, a sign of the region’s resilience,” he said, adding that North America and Asia also reported year-on-year contractions, largely because of domestic market conditions in the US and China. At the same time, Walsh said overall demand still appeared “largely resilient” despite high fuel prices and air fares, although he cautioned that the effects of the war were likely to continue. He added that while the recent fall in oil prices was encouraging, uncertainty over oil supply through the Strait of Hormuz remained a concern, and it would take time before lower oil prices were reflected in normalised jet fuel prices. With airlines operating on margins of around 2 per cent, Walsh said carriers had little choice but to keep testing passenger demand with higher fares as they tried to cover elevated fuel costs. Regionally, the strongest total passenger growth in May came from Africa, where demand rose 6.6 per cent year-on-year and capacity increased 7 per cent. However, the region’s load factor stood at 73.7 per cent, down 0.3 percentage points from a year earlier. Latin America and the Caribbean also performed strongly, with demand up 6.1 per cent and capacity rising 4.6 per cent. The region’s load factor increased 1.2 percentage points to 83.4 per cent. European carriers recorded a 2.7 per cent rise in total passenger demand, while capacity grew 1.8 per cent. Europe posted the highest regional load factor, at 85.9 per cent, up 0.8 percentage points from May 2025. Meanwhile, Asia-Pacific, the largest region by market share, saw total demand fall 1.4 per cent, while capacity declined 2.4 per cent. Its load factor rose 0.9 percentage points to 84.3 per cent. In North America, demand fell 0.8 per cent, while capacity was broadly flat, rising 0.1 per cent. The region’s load factor declined 0.7 percentage points to 82.8 per cent. By contrast, the Middle East remained the weakest performer, with total demand down 28.4 per cent and capacity falling 23.9 per cent. Its load factor dropped 4.7 percentage points to 75.9 per cent. In international markets, IATA said the pace of decline eased compared with April, while several regions recorded record load factors for May. Only the Middle East posted a decline in international load factor. Asia-Pacific airlines recorded a 1.3 per cent rise in international demand, despite a 1.1 per cent fall in capacity. The region’s international load factor rose 2 percentage points to 85.3 per cent. IATA noted that tighter limits on jet fuel imports in Vietnam led to significant short-haul capacity cuts, contributing to a decline in intra-Asia international traffic during the month. European carriers saw international demand rise 3.8 per cent, with capacity up 2.3 per cent. The load factor climbed 1.2 percentage points to 85.4 per cent. IATA also pointed to a 15 per cent increase in direct traffic to Asia, reflecting a continued shift towards direct services between the two regions. North American carriers reported a 1 per cent increase in international demand, while capacity rose 0.6 per cent. The load factor stood at 84 per cent, up 0.4 percentage points. However, Middle Eastern carriers saw international demand fall 28.8 per cent, while capacity dropped 24.3 per cent. The international load factor declined 4.8 percentage points to 76.1 per cent. IATA said the year-on-year comparison remained highly negative because of the Iran war, although the month-to-month impact was easing and the rate of decline was almost half that recorded in April. Latin American airlines posted the strongest international performance, with demand up 10.5 per cent and capacity rising 9 per cent. The region’s load factor increased 1.2 percentage points to 85 per cent. African airlines saw international demand rise 8.9 per cent, with capacity up 8.3 per cent. The load factor edged up 0.4 percentage points to 73.4 per cent. Domestic passenger demand, however, remained under pressure. IATA said domestic RPKs fell 3.1 per cent in May, with the sharpest decline recorded in China. Domestic demand in China dropped 6.2 per cent, while capacity fell 5.5 per cent. IATA said the decline may have been linked to higher fares and the timing of the Dragon Boat Festival, which fell in June this year. The US also recorded a notable domestic decline, with demand down 1.9 per cent and capacity slipping 0.3 per cent. Its domestic load factor fell 1.4 percentage points to 81.8 per cent. By contrast, India remained the strongest domestic market, with demand up 10.1 per cent and capacity rising 7.9 per cent. Its load factor increased 1.7 percentage points to 85.5 per cent. Brazil and Japan also recorded growth, with domestic demand rising 2.8 per cent in both markets. Australia was broadly flat, with demand down 0.1 per cent and capacity down 0.3 per cent.