Middle Eastern airlines experienced modest growth in air cargo demand in July, while passenger traffic showed signs of recovery despite ongoing challenges, according to industry data released this week.

Air cargo demand among carriers in the region rose by 1.7 percent year-on-year in July, driven primarily by activity through Gulf hubs. However, cargo capacity expanded by 4 percent, resulting in a slight decrease in the cargo load factor to 44.1 percent. The Middle East accounted for 13.2 percent of global air cargo traffic in 2025, ranking as the fourth-largest market after Asia-Pacific, North America, and Europe.

In contrast, international passenger demand for Middle Eastern airlines continued to decline, though at a slower pace than earlier in the year. Midyear figures show a 9.5 percent drop from the previous year, with international passenger capacity falling by 5.8 percent. The load factor, a measure of seat occupancy, decreased by 3.3 percentage points to 80.9 percent. When both domestic and international operations are combined, passenger demand dropped 10 percent, while capacity decreased by 6.2 percent, yielding an overall load factor of 80.7 percent—down 3.4 percentage points compared to the prior year.

Globally, passenger demand measured in revenue passenger-kilometers edged up 0.2 percent in July. Excluding the Middle East, the increase was more robust at 1.2 percent. International passenger demand worldwide fell slightly by 0.1 percent but would have risen 1.5 percent without the Middle East’s decline. Marie Owens Thomsen, senior vice president for sustainability and chief economist at the International Air Transport Association (IATA), highlighted the ongoing recovery through Gulf hubs, noting airline confidence for increased demand later in the year. She pointed to an anticipated nearly 3 percent expansion in seat capacity scheduled for September, despite persistent challenges such as high fuel costs, economic uncertainty, and geopolitical tensions.

On air cargo routes linked to the Gulf, traffic continued to be impacted by regional conflicts. Cargo flights between Europe and the Middle East contracted by 16.1 percent in July, while traffic on the Middle East-Asia corridor declined by 14.1 percent, marking the fifth consecutive month of contraction for both regions. Globally, overall air cargo demand increased by 3.9 percent, with international operations growing by 4.7 percent and capacity rising by 1.7 percent globally and 1.8 percent on international routes.

Fuel prices remain a significant pressure point for airlines worldwide. Jet fuel costs surged 222 percent from June and were 56.9 percent higher than the previous year, compounding operational expenses amid volatile global trade conditions. Despite these headwinds, trade volumes continued to grow, with global trade increasing 7.5 percent year-on-year, suggesting a complex outlook for the air travel and cargo sectors in the coming months.