Global Air Passenger Demand to Grow Slower in 2026, IATA Forecasts

New Delhi: The International Air Transport Association (IATA) has announced that global air passenger demand is set to expand in 2026, but at a significantly slower pace than in recent years. Industry-wide, revenue passenger kilometres (RPK) are forecast to grow by just 2.1% year-on-year (YoY), reflecting the impact of the ongoing hostilities in the Middle East and the resulting energy shock.

According to the International Air Transport Association (IATA), the sharp increase in oil prices and the even greater surge in fuel costs weigh on both our industry and the macroeconomic environment. Global GDP growth will likely lose about half a point to around 2.5% in 2026, and inflation could rise to 5%, reducing households' purchasing power.

The Middle East is projected to see a sharp contraction of 11.4% in RPK in 2026. The impact is unsurprisingly the most severe in this region, which faces airspace limitations and other operational constraints, resulting in a significant loss of transfer traffic, IATA stated.

International Air Transport Association (IATA) stated that Africa is projected to record the strongest traffic growth in 2026, at an impressive 10.0%, as travel paths shift, but this is from a very low absolute level compared to other regions. Asia Pacific is expected to grow by 5.1%, and the region is the largest contributor to global traffic growth, accounting for more than half of the total gain.

Europe's passenger traffic will likely grow by 2.8%, benefiting in part from rerouted traffic from the Middle East's disrupted long-haul corridors. European traffic is also shifting toward leisure and visiting friends and relatives, travelling closer to home, according to IATA.

Traffic in Latin America is projected to grow by 5.0%, supported by the relatively resilient regional economies. North America's traffic growth looks set to be limited to 0.8%. The market's mature nature and a slowing US economy will limit upside, particularly in the domestic segment.

International Air Transport Association (IATA) stated, "Overall, we expect the 2026 passenger outlook to slow meaningfully but nevertheless remain positive. While growth is weaker and more uneven across regions, the industry continues to expand, highlighting its remarkable adaptability in the face of sudden and severe external shocks and passengers' need to travel."