Global Air Travel Demand Dips; IATA Warns of Persistence of Middle East Challenges
Global air passenger demand fell by 2. 2%, year-on-year, in May, latest monthly operational data from the International Air Transport Association (IATA) shows. The main driver was the fall-out effect from the. . .
Global air passenger demand fell by 2. 2%, year-on-year, in May, latest monthly operational data from the International Air Transport Association (IATA) shows. The main driver was the fall-out effect from the Middle East conflict – consumer confidence, higher prices, lesser frequency – and IATA has warned that the challenges facing the industry due to the conflict are likely to persist for some time. Demand for international/overseas flights fell by 1. 6% in May, while domestic flight demand was down by over 3%. IATA Director General, Willie Walsh, said:“Air passenger demand was down 2. 2% year-on-year in May on the impact of war in the Middle East. The decline was centered on carriers in the Middle East with a 28. 4% year-on-year fall. That’s a significant improvement on the 46. 6% decline recorded for April, a sign of the region’s resilience. Notably, we also saw year-on-year contractions in demand in both North America and Asia, largely related to domestic market conditions in the US and China. International Air Transport Association (IATA) director general Willie Walsh“Overall, May demand still appeared to be largely resilient in the face of high fuel prices and air fares. While the recent sharp drop in oil prices is an encouraging development, the challenges created by the war will likely persist for some time. 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 ‘normalised’ jet fuel pricing. In the meantime, airlines who are operating on a 2. 0% margin will have little choice but to continue testing demand resilience with higher fares that attempt to cover elevated fuel costs. ”