According to new data, Middle East airlines have seen a 60.8 percent drop in traffic year-on-year following the outbreak of the Iran crisis.
March 2026 figures released by the International Air Transport Association (IATA) showed a 0.6 percent drop in global international demand from March 2025, with capacity falling by 6.2 percent. It comes after Airservices found Australian traffic through the Gulf fell 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. However, the almost 61 per cent decline in international airline traffic in the Middle East limited global growth to 2.1 per cent. Outside the Middle East, demand grew by eight per cent,” said IATA Director General Willie Walsh.
The Asia-Pacific region in particular saw strong growth, with demand rising 11.5 percent, capacity rising 1.5 percent and load factors rising 8.8 percentage points year-on-year to 91.2 percent.
“In Australia, domestic passenger traffic saw a strong rebound, returning to positive territory with a year-on-year growth rate of 8.8 percent after falling 1.1 percent year-on-year in February,” IATA said in its report.
“The gap between demand and capacity expansion resulted in a 0.4 percentage point increase in load factor to 80.1 percent.”
According to Walsh, the price of jet fuel remains a major concern, and is estimated to have more than doubled since the conflict began in late February.
“Everyone is watching what happens with jet fuel, both in supply and prices. On the supply side, in the coming months we could see shortages in parts of the world with a heavy dependence on supplies from the Gulf, especially Asia and Europe,” he said.
“The extraordinarily high cost of jet fuel is increasingly reflected in ticket prices. While this has not affected March traffic or expected bookings to date, it remains to be seen when high prices might begin to change passenger behavior.
“So far, summer is shaping up to be a typically busy time to travel. That’s positive news, but airline resilience is being tested and stabilizing fuel supply and pricing is crucial.
“In the meantime, it is important that regulators are prepared to grant airlines some slot flexibility, 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, through which around 20 per cent of the world’s oil traffic passes. Major companies have also reduced the capacity of national services.
