Global airline passenger projections cut as Iata warns of rising fuel costs and fares

Iata cut global airline passenger capacity projections following the outbreak of war against Iran.

The aviation trade body reduced its March expectations from 5% to 3.3% while releasing heightened demand figures for February.

Iata warned that it was “impossible” to quantify the full impact of the conflict on the Middle East amid a sharp hike in fuel prices.

Total demand for the month before the outbreak of the war rose by 6.1% year on year with capacity up by 5.6% and a record load factor for the month of 81.4%.

International demand was up by 5.9% while domestic rose by 6.3%.

Iata director general Willie Walsh said: “With an RPK [revenue passenger kilometres] expansion of 6.1%, February was a strong month, showing that the fundamentals for demand growth were in place for a positive year. 

“However, without knowing the length and intensity of the war in the Middle East, it is impossible to quantify the full impact that it will have on airline prospects.

“But some things are already clear. Fuel costs have risen sharply. With tight capacity and thin margins, air fares are already rising.

“Capacity deployment is also adjusting, particularly for traffic to, from, or through the Middle East, or in areas where fuel supply is an issue.

“Capacity growth scheduled for March, for example, has eased to 3.3% from earlier predictions of more than 5%.”