Air passenger demand slows to 2.8% in June amid geopolitical uncertainty

Global air passenger demand, measured in revenue passenger kilometers (RPK), increased 0.7% on the month and 2.6% on the year in June, the latest data from the International Air Transport Association showed.

This marked the lowest year-over-year increase since the start of the year, slowed down by disruptions amid conflicts between Iran and Israel during the month.

Middle Eastern airlines registered a 0.2% year-over-year drop in RPK amid a 0.4% decrease in international passenger traffic over the same period. While the Middle East was the only region to see a drop in demand, other regions also saw a slowdown in growth as geopolitical uncertainty likely spurred macroeconomic concerns, curbing global appetite for air travel.

In Asia Pacific, RPK grew 7.2% on the year in June compared with an increase of 13.3% in May. This brought the region's passenger load factor down 1.1 percentage points on the month and 0.2 percentage point on the year to 82.9%.

Still, Asian jet fuel/kerosene prices surged during the month amid oil supply concerns. Platts, part of S&P Global Energy, assessed FOB Singapore jet fuel/kerosene outright price widened to an average of $84.63/b in June from $78.06/b in May.

Similarly, European carriers also faced lower annual demand growth in June at 2.8%, compared with 4.1% last month.

European jet fuel/kerosene prices have softened, with the market structure flipping into a contango on July 30 after six months of steady backwardation. Platts assessed the outright swaps M1 versus M2 structure at minus $1.25/mt at the July 30 close and at minus 50 cents/mt July 31.

Surging flows from the East have also exerted downward pressure on the complex. "The second half of August is massively oversupplied," a source said. "There's about 1 million mt of Far East oil lined up a while ago, on top of the usual Arab Gulf supply -- it's been weeks in the making."

On the air cargo front, global demand rose 1.6% on the month and 0.8% on the year in June. In comparison, air cargo demand rose 2.2% on the year in May.

The modest yearly increase reflected "weakening world trade derived from the US-enforced tariffs that disrupted established air cargo flows," IATA said.

"Overall, air cargo demand grew by a modest 0.8% year over year in June, but there were differing stories behind that number for the industry's major players. Trade tensions saw North American traffic fall by 8.3% and European growth stagnate at 0.8%. But Asia-Pacific bucked the trend to report a 9% expansion. Meanwhile, disruptions from military conflict in the Middle East saw the region's cargo traffic fall by 3.2%," said Willie Walsh, IATA's Director General.

In the week beginning July 28, global seat capacity reached the highest in 2025 so far at 559.4 million seats, up 2.7% compared to the same period last year, data from air travel statistics company OAG showed. Looking ahead, OAG forecasts global seat capacity to trend downward from the week beginning Aug. 4 in line with the end of the peak summer season.

S&P Global Energy analysts expect global demand for jet fuel/kerosene to rise by 410,000 b/d quarter over quarter in the Q3 to 8.1 million b/d. This growth is expected to be supported by China, Southeast Asia and Europe.