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Middle East carriers have seen a 60.8 per cent drop in traffic year-on-year following the outbreak of the Iran crisis, according to new data.
Figures for March 2026 released by the International Air Transport Association (IATA) showed a 0.6 per cent drop in global international demand from March 2025, with capacity down 6.2 per cent. It comes after Airservices found Australian traffic through the Gulf fell by 77 per cent year on year.
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“Demand for air travel continued to grow in March despite disruptions in the Middle East. The nearly 61 per cent decline in international traffic by carriers in the Middle East did, however, restrain global growth to 2.1 per cent. Outside of the Middle East, demand grew by eight per cent,” IATA director-general Willie Walsh said.
The Asia-Pacific region in particular saw solid growth, with demand up 11.5 per cent, capacity up 1.5 per cent, and load factors up 8.8 percentage points year on year to 91.2 per cent.
“In Australia, domestic passenger traffic experienced a strong rebound, returning to positive territory with an 8.8 per cent YoY growth rate following the decline of 1.1 per cent YoY in February,” IATA said in its report.
“The gap between demand and capacity expansion resulted in a 0.4 percentage points increase in the load factor to 80.1 per cent.”
According to Walsh, the price of jet fuel remains a significant concern, with estimates that it has more than doubled since the conflict began at the end of February.
“Everybody’s watching what’s happening with jet fuel – both supply and pricing. On the supply side, over the next months we could see shortages in parts of the world with high dependence on supplies from the Gulf, especially Asia and Europe,” he said.
“The extraordinarily high cost of jet fuel is increasingly being reflected in ticket prices. While this has not impacted March traffic or forward bookings to date, it remains to be seen at what point high prices could start to shift passenger behaviour.
“So far, the summer is shaping up to be a normally busy time for travel. That’s positive news, but airline resilience is being tested and stabilizing the supply and price of fuel is crucial.
“In the meantime, it’s important for regulators to be prepared to grant airlines some flexibility on slots considering the extraordinary circumstances of airspace capacity restrictions and potential fuel rationing.”
Both Qantas and Virgin have increased airfares due to higher fuel costs after Iran effectively closed the Strait of Hormuz, which sees around 20 per cent of global oil traffic. The major carriers have also cut capacity on domestic services.
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