Middle East conflict hits global aviation market in March

Tashkent, Uzbekistan (UzDaily.com) — The International Air Transport Association (IATA) has released data on the global air transport market for March 2026. According to the report, passenger demand increased by 2.1% year-on-year, while air cargo volumes declined by 4.8%. Both indicators were significantly affected by the military conflict in the Middle East, which caused major disruptions to aviation operations in the region.

Overall passenger traffic, measured in revenue passenger-kilometers, rose by 2.1%, while available seat capacity declined by 1.7%. The load factor reached 83.6%, up 3.1 percentage points compared to March 2025. However, excluding the Middle East, global passenger traffic grew by 8%.

International passenger demand fell by 0.6% in March, marking the first decline since March 2021. The main factor was a sharp collapse in Middle Eastern carriers’ performance, with international passenger traffic in the region plunging by 60.8%. The load factor dropped to 67.8%, down 6.6 percentage points. The military conflict involving the United States, Israel, and Iran led to large-scale airspace closures and severe disruptions to air connectivity.

Other regions recorded strong growth. The Asia-Pacific region saw international passenger traffic rise by 11.5%, supported in part by the end of the Lunar New Year holiday period. Europe–Asia routes increased by 29.3% as airlines and passengers shifted toward direct flights, bypassing Gulf hubs. Transatlantic traffic grew by 3.3%, while Asia–North America routes more than doubled their growth pace compared to February. Africa recorded a 19.2% increase, Europe grew by 7.7%, and Latin America by 12.1%.

The domestic market proved more resilient, with demand up 6.5% and capacity increasing by 5.6%. China led growth with a 13.7% increase, followed by Brazil at 10.8%. Australia and Japan also showed stronger momentum. India was an exception, where domestic passenger traffic declined by 1%, which IATA attributed to fewer connecting flights through Middle Eastern hubs.

The cargo segment was also heavily impacted. Global air freight demand, measured in cargo ton-kilometers, fell by 4.8%, while international cargo volumes declined by 5.5%. Capacity decreased by 4.7%. Middle Eastern airlines saw a 54.3% collapse in cargo demand, alongside a 52.4% drop in capacity. Seasonal effects following the Lunar New Year further weighed on the market.

Positive signals were observed in other regions. African carriers posted the strongest global growth at 7.0%, despite a 4.6% decline in capacity, which pushed load factors up by 5.4 percentage points. The Asia-Pacific region grew by 5.4%, while Europe increased by 2.2%. On the Europe–Asia corridor, demand rose by 14.2%, and Africa–Asia increased by 22.6%, marking the ninth consecutive month of growth. In contrast, Gulf-related routes saw sharp declines, with Middle East–Asia down 58.6% and Europe–Middle East down 57.6%.

A major concern is the sharp rise in jet fuel prices, which increased by 106.6% year-on-year in March, driven by a 43.1% rise in oil prices and a 320% surge in refining margins. This is increasingly reflected in higher airfares.

IATA Director General Willie Walsh noted that the industry’s focus remains on jet fuel supply and pricing. He said potential disruptions may continue in regions heavily dependent on Gulf supplies, particularly in Asia and Europe. He also stated that March data and current bookings had not yet reflected fuel price impacts on consumer behavior, but uncertainty remains over when higher costs may begin to affect demand. The upcoming summer season is expected to remain strong, although airline resilience is being tested.

Global industrial production rose by 3.1% year-on-year in February, marking the 38th consecutive month of growth, while world merchandise trade increased by 8.0%. The manufacturing PMI stood at 51.4 points in March, and new export orders reached 50.1 points, both above the 50-point threshold indicating expansion, supporting a positive outlook for air cargo demand.

IATA represents around 360 airlines, accounting for more than 85% of global air traffic.