Air Cargo Demand Drops as Passenger Traffic Rises

Global air cargo demand fell 4.8 per cent year-on-year in March 2026, even as passenger traffic continued its upward trend with a 2.1 per cent increase over the same period, according to figures released on Wednesday by the International Air Transport Association (IATA).

The contrasting fortunes highlight the divergent dynamics within the aviation industry: cargo operators are contending with geopolitical turmoil and rising fuel costs, while passenger airlines continue to benefit from resilient travel demand, despite increasing economic pressure on consumers.

IATA data shows total cargo demand, measured in cargo tonne-kilometres (CTK), declined 4.8 per cent compared to March 2025. Cargo capacity also contracted by 4.7 per cent. International cargo operations recorded an even steeper fall of 5.5 per cent, reflecting the strain on global supply chains already destabilised by the conflict in the Middle East.

IATA Director General Willie Walsh attributed the sharp decline primarily to severe disruptions at major Gulf aviation hubs and the post-Lunar New Year slowdown. However, he noted that underlying trends in freight remain positive.

“Air cargo demand fell 4.8 per cent in March compared to the previous year. This was mostly due to severe disruptions at major Gulf hubs due to the war in the Middle East. The timing of the usual post-Lunar New Year slowdown also added to the decline,” Walsh said.

“The underlying demand trends, at this point, appear strong, and the recent World Trade Organization and International Monetary Fund revisions to trade and GDP projections continue to see growth in 2026. Importantly, air cargo networks are providing the flexibility needed to support global supply chains as they adjust to geopolitical, tariff, and operational strains.”

In the passenger segment, global demand measured in revenue passenger kilometres (RPK) rose 2.1 per cent in March year-on-year. Total capacity dipped by 1.7 per cent, pushing the global load factor to 83.6 per cent, signalling fuller aircraft despite international headwinds.

Domestic travel remained the primary growth engine, surging 6.5 per cent, while international demand slipped 0.6 per cent. The decline was heavily influenced by a 60.8 per cent collapse in international traffic carried by Middle Eastern airlines, which continue to struggle with airspace restrictions and regional instability.

“Demand for air travel continued to grow in March despite disruptions in the Middle East. The nearly 61 per cent decline in international traffic by carriers in the Middle East did, however, restrain global growth to 2.1 per cent. Outside of the Middle East, demand grew by eight per cent,” Walsh explained.

He further cautioned that the industry is monitoring jet fuel markets with growing unease. “Everybody’s watching what’s happening with jet fuel, both supply and pricing. On the supply side, over the next months, we could see shortages in parts of the world with high dependence on supplies from the Gulf, especially Asia and Europe,” Walsh added.