The International Air Transport Association (IATA) revealed that global air passenger demand recorded a 2.2% drop in May 2026 due to the direct impact of the war in the Middle East. Despite this contraction and persistent high fares, the sector demonstrated remarkable resilience, achieving a record load factor for a month of May.
Geopolitical Impact and Global Market Resilience
Commercial aviation’s performance during May 2026 was heavily conditioned by geopolitical tensions. Total passenger demand, measured in Revenue Passenger Kilometers (RPKs), contracted by 2.2% compared to May 2025. However, excluding the Middle East region, global traffic showed a 0.7% growth, reflecting the robustness of other markets.
At the same time, total industry capacity, measured in Available Seat Kilometers (ASKs), decreased by 2.3% year-on-year. This supply management pushed the global Passenger Load Factor (PLF) to 83.5% (+0.1 percentage points compared to May 2025), consolidating an all-time high for the fifth month of the year.
Overall performance was split into two major operating segments:
- International Market: Demand fell 1.6% compared to May 2025. Excluding the Middle East, international traffic expanded by 3.1%. International capacity was reduced by 2.4%, and the PLF stood at 83.7% (+0.7 percentage points).
- Domestic Market: Global domestic demand fell 3.1% year-on-year. Domestic market capacity decreased by 2.1%, and the average PLF closed at 83.0% (-0.8 percentage points).
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Regional Breakdown: International Passenger Markets
In the international arena, the pace of decline slowed compared to April, and multiple regions recorded record load factors, with the Middle East being the only zone to report a drop in its Load Factor.
- Middle East: Moderating declines
Middle East airlines registered a 28.8% decrease in international demand and a 24.3% reduction in year-on-year capacity. The international Load Factor stood at 76.1% (-4.8 percentage points). The impacts stemming from the war in Iran continue to generate highly negative year-on-year comparisons; however, the rate of contraction represented nearly half of the drop recorded in April, showing signs of resilience in the region. - Latin America and the Caribbean: Leading growth
Latin American carriers led international momentum with a 10.5% increase in international RPKs. Capacity in the region climbed 9.0%, and the Load Factor reached 85.0% (+1.2 percentage points compared to May 2025). - Europe: Consolidating direct connections to Asia
European international traffic increased by 3.8%, driven by a 2.3% capacity growth, reaching a Load Factor of 85.4% (+1.2 percentage points). A 15% increase in direct traffic to Asia stood out, reflecting an ongoing shift toward non-stop services between the two regions. - Asia-Pacific: Supply constraints in Vietnam
Operators in the region reported a 1.3% rise in international demand, supported by a 1.1% capacity decrease that lifted the Load Factor to 85.3% (+2.0 percentage points). However, intra-regional connectivity was affected by strict limits on jet fuel imports in Vietnam, causing significant capacity cuts on short-haul routes. - Africa and North America: Upward trends
Africa: Recorded an 8.9% growth in international demand and an 8.3% increase in capacity, placing its Load Factor at 73.4% (+0.4 percentage points).
North America: North American airlines raised their international RPKs by 1.0%, with a 0.6% increase in capacity and a Load Factor of 84.0% (+0.4 percentage points).
Domestic Markets: Weakness in Major Economies
The 3.1% contraction in global domestic RPKs was heavily linked to internal conditions within the world’s two largest economies.
China recorded the steepest decline, a trend associated with rising airfares and a seasonal factor: the Dragon Boat Festival took place in June this year instead of May. Meanwhile, the United States experienced a notable contraction in its domestic market. These results contrasted with the rest of the world’s domestic markets, which maintained moderate growth rates.
Financial Challenges: Fuel and Tight Profit Margins
Despite the recent sharp decline in international oil prices, airlines continue to face substantial operational challenges. Crude oil supply through the Strait of Hormuz remains uncertain, and it will take time before the benefits of cheap oil translate into normalized jet fuel pricing.
“In the interim, airlines operating on a razor-thin 2.0% profit margin will have little choice but to continue testing demand resilience through higher fares to try to cover elevated fuel costs,” stated Willie Walsh, IATA Director General.
The outlook for the coming months suggests that while overall demand remains robust in the face of high costs, operational challenges stemming from the conflict in the Middle East will persist in the medium term.
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