KUALA LUMPUR (Sept 1): The global aviation industry is seeing an uptick in air passenger and air cargo volume, months after the Iran war outbreak, according to the International Air Transport Association (IATA).

According to IATA’s statement on Monday (Aug 31), total demand, measured in revenue passenger kilometres (RPK), increased 0.2% year-on-year (y-o-y) in July, after months of contraction triggered by the Iran war.

Excluding the Middle East, demand actually grew by 1.2% y-o-y, reflecting resilient underlying demand and air travel recovery.  

Airlines in Latin America and the Caribbean recorded the strongest traffic growth among regions in July, with demand rising 6.1% y-o-y, thanks to strong international demand.

Other carriers that recorded growth were African (5.2% y-o-y), European (2.1% y-o-y) and Asia Pacific (1.0% y-o-y) carriers; the latter benefitted from stronger demand in China and Japan.

Meanwhile, Middle East carriers’ traffic volume fell by 10% y-o-y, recording the weakest regional performance, although the pace of decline continued to moderate as geopolitical disruptions partially eased.

North American airlines also reported a 1.2% y-o-y decline in traffic volume, marking a third consecutive month of contraction as the US domestic market continues to weaken.

Nevertheless, airlines are optimistic that air traffic demand will rise, with global seat capacity projected to expand by 3% y-o-y in September this year.

“Although high fuel costs, economic uncertainty, and geopolitical tensions continue, carriers are expressing confidence in demand for the last part of the year with an almost 3% expansion of seat capacity in September,” said Marie Owens Thomsen, IATA’s senior vice-president sustainability, and chief economist.

The IATA is a global airline trade association representing over 370 airlines, whose data accounts for approximately 85% of global air traffic.

Air cargo demand grew 3.9% y-o-y in July, with Asia-Pacific, Europe and North America accounting for over 90% of the overall increase.

Over the year, dedicated freighters such as FedEx gained market share as belly-hold traffic declined, reflecting stronger demand for larger and specialist shipments, as well as greater operational flexibility offered by freighters.

“Looking ahead, the outlook remains broadly positive, supported by manufacturing activity, export orders and global trade.

However, higher fuel prices, geopolitical tensions and tariff uncertainty must be watched carefully,” Thomsen noted.

According to IATA, jet fuel costs increased sharply since January 2026 due to Middle East refinery outages, renewed shipping disruption, low jet fuel and diesel inventories, and exceptionally weak Russian middle-distillate exports constraining supply.

Overall, air cargo demand remains resilient, although elevated fuel costs and geopolitical risks could temper growth and increase cost pressures for airlines.