…forecasts cheaper airfares despite rise in passenger demand
The International Air Transport Association (IATA) has reported a 3.8 per cent year-on-year increase in global passenger demand for January 2026, as measured in revenue passenger kilometres (RPK).
According to data released on Monday, via its X handle, total capacity, measured in available seat kilometres (ASK), rose by 3.5 per cent compared to January 2025, while the global load factor edged up to a record 82.0 per cent for the month, an increase of 0.2 percentage points year-on-year.
IATA noted that January’s performance was partly influenced by the shift in the Lunar New Year holiday from January in 2025 to February in 2026. The holiday period typically drives a spike in travel demand, making the year-on-year comparison appear slightly weaker.
The Lunar New Year usually falls between January 21 and February 20 each year. The holiday is one of the most important holidays in Asia, marking the start of a new year based on the lunar calendar.
Celebrated across China and several other Asian countries, the festival typically triggers one of the world’s largest annual travel surges as millions journey home for family reunions and festivities.
According to the association, International passenger demand grew by 5.9 per cent compared to January 2025, with capacity increasing by 5.8 per cent. The international load factor reached a record 82.5 per cent for January, up 0.1 percentage points from a year earlier.
In contrast, domestic demand was largely flat, rising just 0.1 per cent year-on-year. Domestic capacity declined by 0.4 per cent, but the load factor improved to 81.2 per cent, also a record high for January, up 0.4 percentage points compared to the same period in 2025.
Willie Walsh, Director General, IATA said the timing of the Lunar New Year partly explained the slower pace of expansion but expressed optimism about the year ahead.
He added that schedule data indicate a 5.2 per cent increase in global seat capacity by March, potentially marking the fastest expansion since April 2024. However, he cautioned that recent geopolitical developments have introduced uncertainty around traffic flows and fuel costs.
“The timing of the Lunar New Year partly explains the slightly slower 3.8% expansion in January, but the fundamentals are in place for demand to continue strong growth in 2026. Schedule data, for example, indicate a 5.2% increase in global seat capacity by March, which would be the fastest expansion since April 2024.
“Events over the weekend have, however, introduced some uncertainty into the evolution of traffic and fuel costs. We all hope for an early peaceful resolution to the current hostilities. In the meantime, it is critical that states respect their obligation to keep civilians, and civil aviation free from harm,” Walsh said
Providing a regional breakdown of international passenger markets, IATA said all regions recorded growth, although expansion slowed in some markets, particularly in Asia-Pacific, due to the Lunar New Year shift.
Asia-Pacific airlines posted a 4.4 per cent increase in demand, while capacity rose 5.2 per cent. The load factor stood at 85.9 per cent, down 0.7 percentage points year-on-year.
European carriers recorded a 6.3 per cent rise in demand with a 5.7 per cent capacity increase, pushing the load factor to 79.4 per cent, up 0.5 percentage points.
North American airlines saw demand grow by 3.4 per cent and capacity by 2.6 per cent, resulting in a load factor of 82.3 per cent, up 0.6 percentage points.
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Middle Eastern carriers reported a 7.2 per cent increase in demand, alongside a 7.8 per cent rise in capacity. The load factor was 83.2 per cent, down 0.4 percentage points compared to January 2025.
Latin American airlines recorded one of the strongest performances, with demand surging 11.4 per cent and capacity up 8.9 per cent. The load factor climbed to 86.5 per cent, an increase of 2.0 percentage points year-on-year.
African airlines also posted double-digit growth, with demand rising 11.7 per cent and capacity up 10.1 per cent. The region’s load factor improved to 77.4 per cent, up 1.1 percentage points.
On domestic markets, IATA said traffic in China, Australia and the United States declined year-on-year, largely due to the holiday calendar shift, while Brazil stood out with a 10.9 per cent increase in traffic.
Walsh further noted that average airfares are expected to decline in real terms throughout 2026, continuing a long-term trend of more affordable air travel.
However, he warned that rising infrastructure charges, regulatory burdens and the increasing cost of the energy transition are exerting pressure on airlines.
He pointed out that 2025 recorded the slowest rate of new airline start-ups since 1999, urging governments to address cost and regulatory challenges to safeguard competition and protect consumer benefits derived from global connectivity.
“Average fares are expected to fall in real terms over the course of 2026, continuing a long-established trend of ever more affordable air travel. This is despite persistent cost pressures from rising infrastructure charges, onerous regulatory burdens, and the mounting cost of the energy transition.
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“In the face of these cost and regulatory pressures, it is notable that 2025 saw the slowest rate of new airline start-ups since 1999. Governments who value competition should consider this a canary in the coal mine. To protect and enhance the consumer benefits of connectivity, these cost and regulatory issues must be addressed,” he noted.
