Australia’s aviation network has recorded its first contraction in daily passenger flights in more than 10 months.
in your Australian Aviation Network Overview Report By May 2026, Airservices Australia said that while aviation had shown “consistent resilience and flexibility” during the Iran conflict, the war had caused “real pressure on the sector” during its more than 100 days.
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It comes as the United States and Iran sign a memorandum of understanding for a ceasefire ahead of more formal negotiations to end the war.
Daily passenger flights were down 2.5 per cent year-on-year, while around 180,000 Australian domestic seats were removed compared to May 2025, representing a 3.8 per cent reduction in flights.
“These adjustments were concentrated on high-volume corridors between the capital and the city, together with a targeted reduction of lower-demand regional and leisure services and the optimization of longer, fuel-intensive sectors.
“This reflects measures to maintain core network coverage while moderating lower throughput capacity. Domestic flight volumes at major East Coast capital airports are approximately 3% to 5% below last year’s levels.”
However, the report also noted that projected weekly demand capacity “is still slightly above 2025 levels.”
“Domestic demand has softened, with capacity adjustments concentrated on major capital corridors and specific lower-performing routes. This reflects a near-term recalibration to maintain core connectivity while optimizing capacity, fleet utilization and performance,” Airservices said.
“International growth moderated to 1.3 percent, well below the 12-month average of seven percent, with clear divergence between markets.”
According to the report, traffic in the Middle East remains more than 40 percent below last year, limited by the “continued disruption of key transit routes.”
“In contrast, Asia Pacific markets continue to grow steadily, supported by short- and medium-haul demand and capturing displaced European traffic. North American demand is increasing, supported by a strengthening Australian dollar during this reporting period and increased trans-Pacific capacity,” it reads.
“The Middle East conflict is further disrupting already limited aircraft supply chains, contributing to a record backlog of more than 16,600 aircraft worldwide.
“At the same time, the continued deployment of next-generation aircraft across the Australian network, albeit at a slower pace, is contributing to improved efficiency and environmental outcomes.”
The Department of Foreign Affairs and Trade (DFAT) this week reduced its travel warnings across much of the Middle East as a potential peace deal approaches.
Travel advice for Bahrain, Israel, Kuwait, Qatar and the United Arab Emirates has been reduced from level 4 (“do not travel”) to level 3 (“reconsider your need to travel”), although some areas of Israel remain at level 4. The move will make it easier for Australians to transit through the Gulf to Europe.
