Global air passenger demand fell 2.2% year on year in May, dragged down by a sharp contraction among Middle East carriers as conflict in the region weighed on traffic, the International Air Transport Association (IATA) announced on June 30, media reported.

The figures point to the toll of the Iran war on regional aviation, even as the rate of decline eased from April, with capacity constraints and high fuel costs continuing to pressure carriers operating on thin margins. Excluding the Middle East, global demand grew 0.7%.

Total capacity fell 2.3% y/y, while the load factor reached 83.5%, a record high for May. International demand fell 1.6%, though it rose 3.1% excluding the Middle East. Domestic demand fell 3.1%, with the largest drop in China.

Middle Eastern carriers saw demand fall 28.4% y/y, an improvement on the 46.6% decline recorded in April. North America and Asia also posted contractions, largely tied to domestic conditions in the US and China.

"Air passenger demand was down 2.2% year-on-year in May on the impact of war in the Middle East. The decline was centered on carriers in the Middle East with a 28.4% year-on-year fall. That's a significant improvement on the 46.6% decline recorded for April, a sign of the region's resilience," said Willie Walsh, IATA director general, Emerging Travel reported him as saying.

Walsh said the recent drop in oil prices was encouraging but that the war's challenges would persist, with oil supply through the Strait of Hormuz remaining uncertain.

"Airlines who are operating on a 2.0% margin will have little choice but to continue testing demand resilience with higher fares that attempt to cover elevated fuel costs," said Walsh.

European carriers recorded a 3.8% rise in international demand, with direct traffic to Asia up 15%. Asia-Pacific airlines posted a 1.3% increase, while Vietnam's tighter limits on jet fuel imports led to capacity cuts on short-haul routes. Latin American airlines grew demand 10.5% and African carriers 8.9%.

In domestic markets, Chinese traffic fell 6.2%, which may be linked to higher fares and the timing of the Dragon Boat Festival in June this year, while US domestic demand fell 1.9%. Indian domestic traffic rose 10.1%.