IATA: global air passenger demand fell in May amid Middle East war

Global air passenger demand dropped 2.2% year-on-year in May 2026, marking a second consecutive month of contraction as the war in the Middle East continued to weigh on the aviation industry, according to data released Monday by the International Air Transport Association (IATA).iata+1

The decline, measured in revenue passenger kilometers, was an improvement over April's 3.4% drop, with the industry body noting that demand outside the Middle East actually grew 0.7%. The global load factor reached 83.5%, a record high for May.atc-network+1

Middle East Carriers Show Signs of Recovery

Middle Eastern carriers bore the brunt of the conflict's impact, recording a 28.4% year-on-year fall in demand — still severe, but a marked improvement from the 46.6% plunge in April. IATA Director General Willie Walsh called the improvement "a sign of the region's resilience".paxnews+2

Walsh noted that year-on-year contractions also appeared in North America, where demand fell 0.8%, and the Asia-Pacific region, down 1.4%, "largely related to domestic market conditions in the US and China". Domestic demand globally contracted 3.1%, with China posting the steepest decline at 6.2%.iata+1

Fuel Costs and Thin Margins Test Airlines

While acknowledging that a recent sharp drop in oil prices was "an encouraging development," Walsh cautioned that challenges from the war would persist. "Oil supply through the Strait of Hormuz remains uncertain and it is likely to take time before the benefit of lower oil prices is reflected in 'normalized' jet fuel pricing," he said.iata+1

Airlines operating on industry-wide net margins of just 2.0% — half the level achieved in 2025 — "will have little choice but to continue testing demand resilience with higher fares that attempt to cover elevated fuel costs," Walsh added.iata+1

IATA's June financial outlook projected the industry would earn $23 billion in net profit in 2026, roughly half the $45 billion achieved in 2025, with jet fuel prices averaging $152 per barrel for the year — nearly 70% above 2025 levels.iata

Bright Spots Beyond the Conflict Zone

Outside the Middle East, several regions posted strong gains. Latin American carriers led with 10.5% international demand growth, followed by African airlines at 8.9%. European carriers saw international demand rise 3.8%, buoyed by a 15% increase in direct traffic to Asia as passengers bypassed disrupted Middle Eastern hubs. India's domestic market surged 10.1%.iata

The divergence underscores an industry adapting to geopolitical disruption: rerouting passengers, filling seats at record rates, and raising fares — even as the conflict's financial toll mounts.