Middle East Airlines Face Demand Drop Amid Global Passenger Growth Slowdown: What It Means for Your Business and Investments
In June, air travel demand in the Middle East exhibited modest growth of 2.6 percent compared to June 2024, according to data released by the International Air Transport Association (IATA). However, Middle Eastern carriers experienced a slight year-on-year decline in demand by 0.4 percent. Capacity for these carriers increased by 1.1 percent, while the load factor declined by 1.2 percentage points to 78.7 percent. The ongoing military conflict notably affected traffic on routes to North America, which fell by 7 percent, and Europe, down by 4.4 percent year-on-year.
Globally, total passenger demand, measured in revenue passenger kilometers (RPK), rose by 2.6 percent compared to June 2024. Total capacity, measured in available seat kilometers (ASK), also increased by 3.4 percent year-on-year. Consequently, the overall load factor dropped by 0.6 percentage points to 84.5 percent.
International demand grew by 3.2 percent year-on-year, with capacity up 4.2 percent. The international load factor decreased by 0.8 percentage points to 84.4 percent. On the domestic front, demand increased by 1.6 percent while capacity rose 2.1 percent, resulting in a slight load factor decrease of 0.4 percentage points to 84.7 percent.
Willie Walsh, IATA’s Director General, commented, “In June, demand for air travel grew by 2.6 percent. That’s a slower pace than we have seen in previous months and reflects disruptions around military conflict in the Middle East. With demand growth lagging the 3.4 percent capacity expansion, load factors dipped 0.6 percentage points from their all-time record-high levels. At 84.5 percent globally, however, load factors are still very strong. And with a modest 1.8 percent capacity growth visible in August schedules, load factors over the Northern summer are unlikely to stray far from their recent historic highs.”
International RPK growth reached 3.2 percent year-on-year in June, but the load factor declined across all regions due to capacity growing faster than demand. The Middle East saw the steepest decline in RPK growth, contracting by 0.4 percent year-on-year, largely influenced by the ongoing military conflict.
Special Analysis by Omanet | Navigate Oman’s Market
The recent dip in Middle Eastern air travel demand amid military conflict signifies a cautious environment for Oman’s aviation and tourism sectors, with route disruptions primarily affecting traffic to North America and Europe. However, strong global load factors and moderate capacity growth present opportunities for strategic route optimization and investment in resilient travel infrastructure. Smart investors and entrepreneurs should focus on diversifying markets and enhancing customer experience to navigate ongoing geopolitical uncertainties while capitalizing on sustained underlying demand.
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