Malaysia Airlines Resumes Flights to Jeddah and Madinah from 4

Global passenger demand for air travel declined by 1.7% year-on-year in June 2026, as weaker domestic markets in China, the United States and Japan, together with ongoing disruption in the Middle East, continued to weigh on the aviation sector, according to the latest figures from the International Air Transport Association (IATA).

Total airline capacity, measured in available seat kilometres (ASK), fell 1.3% compared with June 2025, while the global passenger load factor slipped 0.4 percentage points to 84.2%.

International travel demand decreased 0.9% year-on-year, accompanied by a 0.6% reduction in capacity. Despite the overall decline, IATA said international traffic excluding the Middle East increased 1.1%, underscoring the significant impact of regional disruptions on global aviation performance.

Domestic markets experienced a steeper slowdown, with passenger demand falling 3.0% and capacity declining 2.4% compared with the same month last year. Domestic load factor stood at 84.0%, down 0.5 percentage points.

IATA Director General Willie Walsh said global travel demand remains closely tied to economic conditions and geopolitical developments. He noted that the decline was primarily driven by weaker domestic markets in China, the US and Japan, along with subdued, though improving, international demand for Middle Eastern carriers.

Walsh said renewed regional tensions could slow the recovery of Middle Eastern aviation, while higher fuel prices continue to place upward pressure on airfares. He added that stabilising the security situation in the Middle East and ensuring steady oil supplies would improve prospects for airlines, economies and travellers worldwide.

Regional performance remained mixed during the month.

Airlines in the Asia-Pacific region posted a 0.4% increase in international demand despite a 1.1% decline in capacity, lifting the regional load factor to 84.0%. IATA attributed a 4.8% decline in international travel within Asia to capacity reductions driven by higher fuel costs.

European carriers delivered stronger results, with passenger demand rising 1.5% and capacity increasing 2.0%. The region recorded a load factor of 87.1%, while the Europe-Asia corridor achieved the strongest growth among major international markets, expanding 11% year-on-year.

North American airlines reported a 1.0% decline in demand, with capacity down 0.7% and load factor easing to 86.9%.

Middle Eastern carriers recorded the sharpest regional downturn, with demand falling 14% and capacity decreasing 11%, reducing the region's load factor to 76.3%. IATA said comparisons continued to be affected by the impact of the Iran conflict, although the pace of decline has moderated since April as operations gradually recovered.

Elsewhere, Latin American airlines recorded a 3.5% increase in passenger demand alongside a 6.3% rise in capacity, while African carriers posted the strongest regional growth, with demand increasing 6.7% and capacity rising 7.0%.

Domestic markets remained under pressure across most major economies. China's domestic traffic declined 5.2%, while Japan recorded a 3.8% drop, with elevated fuel costs identified as a contributing factor. Brazil was the only major domestic market to register growth, with passenger demand rising 0.9%, although its load factor declined by 2.5 percentage points.

IATA said improving geopolitical stability and easing fuel price pressures will be critical to strengthening airline performance and supporting the continued recovery of global air travel.

Source: ZAWYA