Global air passenger demand fell 2.2% year on year in May as the conflict in the Middle East continued to weigh on the aviation sector, according to the International Air Transport Association (IATA). Measured in revenue passenger kilometres (RPKs), demand declined alongside a 2.3% reduction in capacity, measured in available seat kilometres (ASKs). Even so, airlines continued to fill more seats on average, pushing the global passenger load factor up 0.1 percentage points to a record 83.5% for the month.

According to IATA, the overall decline was largely driven by the Middle East. Excluding the region, global passenger demand would have increased by 0.7%.

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Middle East Disruption Distorts The Global Picture

The gap between international and domestic markets became more pronounced in May. International passenger demand declined 1.6% year on year as capacity fell 2.4%, yet the international load factor still improved by 0.7 percentage points to 83.7%. Without the disruption in the Middle East, international demand would have risen 3.1%.

Domestic markets, by contrast, remained under greater pressure. Revenue passenger kilometres fell 3.1% from May 2025, while capacity declined 2.1%, bringing the domestic load factor down 0.8 percentage points to 83%.

IATA Director General Willie Walsh said the conflict in the Middle East continued to have the greatest impact on airlines in the region. Middle Eastern carriers recorded a 28.4% year-on-year decline in passenger demand in May, although that represented a marked improvement from the 46.6% drop reported in April.

“That’s a significant improvement on the 46.6% decline recorded for April, a sign of the region’s resilience,” Walsh said.

He added that North America and Asia also experienced year-on-year declines, driven largely by weaker domestic markets in the United States and China.

Fares, Fuel And Margin Pressure

Despite those headwinds, Walsh said passenger demand remained “largely resilient,” although the impact of the conflict is likely to persist.

He pointed to the recent decline in oil prices as an encouraging development but cautioned that uncertainty surrounding supply through the Strait of Hormuz remains a significant risk. Even if crude prices continue to ease, it will take time before lower costs are reflected in jet fuel prices.

With airlines operating on margins of around 2%, Walsh said carriers have little choice but to continue testing passenger demand with higher fares as they seek to offset elevated fuel costs.

Regional Performance Shows A Split Market

Performance varied considerably across regions, highlighting the uneven impact of current market conditions.

Africa recorded the strongest overall passenger growth in May, with demand rising 6.6% year on year as capacity increased 7%. Even so, the region’s load factor slipped 0.3 percentage points to 73.7%.

Latin America and the Caribbean also delivered solid results, posting 6.1% growth in passenger demand alongside a 4.6% increase in capacity. As a result, the regional load factor improved by 1.2 percentage points to 83.4%.

European airlines remained in positive territory, reporting a 2.7% increase in passenger demand while expanding capacity by 1.8%. The region also achieved the highest load factor worldwide at 85.9%, up 0.8 percentage points from a year earlier.

Elsewhere, the picture was weaker. Asia-Pacific, the largest aviation market by share, saw demand decline 1.4% as capacity fell 2.4%, although its load factor still rose by 0.9 percentage points to 84.3%.

North America also recorded softer results, with demand slipping 0.8% while capacity was broadly unchanged, edging up 0.1%. That left the region’s load factor at 82.8%, down 0.7 percentage points from May 2025.

The Middle East remained by far the weakest-performing region. Passenger demand fell 28.4% year on year, while capacity declined 23.9%, pushing the regional load factor down 4.7 percentage points to 75.9%.

International Markets Show Greater Resilience

International travel proved more resilient than domestic markets in May. According to IATA, the pace of decline moderated compared with April, while several regions recorded their highest-ever May load factors. The Middle East was the only region to see its international load factor decline.

Asia-Pacific airlines increased international passenger demand by 1.3% despite a 1.1% reduction in capacity, lifting the regional load factor by 2 percentage points to 85.3%. IATA said tighter restrictions on jet fuel imports in Vietnam contributed to significant cuts in short-haul capacity, resulting in weaker intra-Asia international traffic.

European carriers also delivered solid results. International demand rose 3.8% as capacity expanded 2.3%, pushing the load factor up 1.2 percentage points to 85.4%. IATA also highlighted a 15% increase in direct traffic between Europe and Asia, reflecting a continued shift towards non-stop routes.

North American airlines reported more modest growth, with international demand increasing 1% and capacity rising 0.6%. That helped lift the regional load factor by 0.4 percentage points to 84%.

The Middle East remained the weakest-performing international market. Passenger demand fell 28.8% year on year, while capacity declined 24.3%, reducing the international load factor by 4.8 percentage points to 76.1%. Although comparisons with last year continue to reflect the impact of the conflict involving Iran, IATA said conditions improved compared with April, with the pace of decline almost halving month on month.

Latin American airlines posted the strongest international performance, with demand rising 10.5% alongside a 9% increase in capacity. African carriers also recorded healthy growth, with international demand up 8.9% and capacity increasing 8.3%, lifting the regional load factor to 73.4%.

Domestic Markets Remain Under Pressure

Domestic aviation continued to face greater headwinds in May, with IATA reporting a 3.1% decline in revenue passenger kilometres across domestic markets.

China recorded the sharpest slowdown, with passenger demand falling 6.2% as capacity declined 5.5%. According to IATA, the weaker performance may have reflected both higher airfares and the timing of the Dragon Boat Festival, which took place in June this year rather than May.

The United States also saw domestic demand weaken. Passenger traffic declined 1.9%, while capacity slipped 0.3%, bringing the domestic load factor down 1.4 percentage points to 81.8%.

India remained the strongest domestic aviation market, with demand rising 10.1% and capacity increasing 7.9%. The country’s load factor improved by 1.7 percentage points to 85.5%.

Brazil and Japan also remained in growth territory, with domestic demand increasing 2.8% in both markets. Australia, meanwhile, was broadly unchanged, with demand edging down 0.1% and capacity declining 0.3%.