Geopolitical crisis shapes new trends in the aviation industry: Will profitability struggles return?
The latest data and forecasts for 2026 indicate a drastic slowdown in global air transport demand. At the same time, airlines are attempting to mitigate operational shocks through strict capacity control.
The International Air Transport Association (IATA) notes third consecutive month of falling global demand in May. The main cause lies in the escalation of conflicts in the Middle East, more precisely the war in Iran. Long-term forecasts for the current year predict a modest expansion of revenue passenger kilometres (RPK) of just 2.1 percent. This represents a significant loss of momentum compared to the previous strong recovery period. However, instability in key aviation corridors is creating uncertainty across the international market.
Record occupancy as a defence mechanism
Faced with declining interest and altered routes, Airlines have responded with aggressive operational cuts. May's seat capacity was reduced by 2.3 percent globally, resulting in an interesting paradox. Thanks to such conservative network management, average cabin load factor reached a record 83.5 percent for the month.
The Middle East is experiencing the sharpest decline in traffic, by as much as 28.4 percent. However, even traditionally strong markets such as North America and the Asia-Pacific region have not avoided the downturn. In contrast, markets like India, and regions such as Africa and Latin America, are showing temporary immunity to the general trend of slowdown.
Energy shock and macroeconomic pressures
In addition to direct operational blockades, geopolitical upheaval has triggered a powerful energy surge. The leap in crude oil prices has directly driven up jet fuel costs, placing immense pressure on carriers' profit margins.
This pressure also spills over into the broader economic picture. Analysts estimate that global GDP growth will slow to around 2.5 percent in 2026. Inflation could also reach 5 percent. The loss of household purchasing power directly affects the reduction in long-haul travel. The 7.4 percent drop in May forward bookings confirms this. For airlines, this means a return to strict discipline – the focus shifts from mere volume and passenger numbers to exclusively preserving profitability per flight.
