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Middle East tensions and weak domestic markets hit airline demand

Global passenger demand fell almost 2% year-on-year in June, according to figures from airline body IATA.

Total demand, measured in revenue passenger kilometers (RPK), was down 1.7% compared to June 2025.

Excluding the Middle East, demand declined by 0.6%. Total capacity, measured in available seat kilometers (ASK), decreased 1.3% year-on-year. Load factor fell 0.4 percentage points (ppt) to 84.2%.

International demand fell 0.9% compared to June 2025. Excluding the Middle East, demand grew by 1.1%. Capacity was down 0.6% year-on-year, and load factor fell 0.2ppt to 84.2%.

Domestic demand fell 3%, capacity dropped 2.4% and load factor dropped 0.5ppt to 84%.

IATA Director General Willie Walsh said the drop in global demand is ‘largely due to domestic market declines in China, the US, and Japan, and weak but improving international demand for Middle East carriers’.

“While Middle East performance improved, renewed tensions will not help the region’s recovery and the knock-on impact of rising fuel prices will continue to burden travellers with higher airfares,” he said.

“People continue to travel, which is an important contributor to global economic growth. There is no doubt, however, that stabilising the situation in the Middle East and normalising oil supplies would improve prospects for airlines, economies, and societies the world over.”

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