Middle East downturn pulls global air demand lower

Global air passenger demand dropped 0.8 percent in August, according to the International Air Transport Association, as Middle Eastern traffic declined more sharply than growth in other regions. Total demand fell when measured in revenue passenger kilometres, while airlines expanded capacity by 0.3 percent. The global load factor declined by 0.9 percentage points to 85.1 percent.

This marked a shift from July, when demand rose 0.2 percent. Outside the Middle East, demand still grew 0.6 percent in August, although at half the pace seen a month earlier. Middle Eastern airlines saw the most significant decline, with demand down 14.6 percent year-on-year and capacity reduced by 9.3 percent. Their load factor dropped 4.9 percentage points to 78.9 percent.

Marie Owens Thomsen, IATA's senior vice-president for sustainability and chief economist, noted the region's recovery had been interrupted after an improving trend. Middle Eastern international traffic fell further by 14.2 percent year-on-year, with capacity down 9 percent, causing the load factor to decline 4.8 percentage points to 79.1 percent.

Middle East-Asia route traffic contracted 11.7 percent, compared to an 8.6 percent decline in July. Globally, international passenger demand decreased 0.9 percent year-on-year, with capacity unchanged and the load factor down 0.8 percentage points to 85 percent. Excluding Middle Eastern airlines, international demand rose 1.3 percent.

Performance varied by region, with European carriers up 2.1 percent in international demand, and capacity increasing 2.8 percent. Europe-Asia traffic grew 12.2 percent, while transatlantic traffic fell 2.4 percent. Asia-Pacific airlines saw a 0.1 percent drop in international demand and a 0.9 percent capacity reduction. Within Asia, traffic declined 2 percent, while Asia-North America traffic grew 2.5 percent.

North American carriers reported a 1.7 percent decline in international demand and a 1.1 percent capacity reduction. Latin American and African airlines grew 6.7 percent each in international passenger demand, with capacity rising 6.4 percent in Latin America and 8.3 percent in Africa. Latin America and the Caribbean led regional growth at 5.3 percent, followed by Africa at 4.4 percent.

Asia-Pacific demand rose 1.4 percent, and Europe increased 0.7 percent. North America declined 2.2 percent. Capacity grew in every region except the Middle East and North America, with Africa's increase at 7.2 percent. The divergence left passenger loads under pressure. Europe had the highest load factor at 87.5 percent, followed by Asia-Pacific at 85.9 percent.

Domestic demand fell 0.5 percent globally, despite a 0.7 percent capacity increase. The domestic load factor dropped 1.1 percentage points to 85.3 percent. India's domestic market saw the steepest contraction among the six major markets, with demand down 7.5 percent year-on-year and the load factor declining 5.4 percentage points to 78.7 percent.

The United States' domestic demand fell 2.9 percent, while Japan's decreased by 2 percent. China saw a 5.8 percent increase in domestic demand during the summer travel period. Brazil grew 4.3 percent, and Australia increased by 2.3 percent. Owens Thomsen suggested global connectivity was weaker in August, except for notable exceptions like China's domestic market.

She said coming months would reveal if higher energy prices and geopolitical instability were prompting travelers to adjust their budgets.