While autumn leaves fall in Australia, March brought a modest lift in global skies—at least if you’re not flying over North America or the Middle East.
According to the International Air Transport Association (IATA), global passenger demand in March 2025 rose by 3.3% compared to the same month last year, measured in revenue passenger kilometres (RPKs). That’s a shade better than February’s 2.7% gain, offering a glimmer of hope amid stubborn concerns over economic headwinds, tariffs, and some regional turbulence—both literal and fiscal.
But before the aviation industry cracks open the champagne, it’s worth noting that this demand was outpaced by a 5.3% rise in global seat capacity, sending the average load factor sliding to 80.7%, down 1.6 percentage points on March 2024. In plain English: more seats are going begging.
Walsh Warns: Growth Brings Challenges
“Passenger demand grew by 3.3% year-on-year in March, a slight strengthening from February,” said IATA Director General Willie Walsh. “But with capacity expanding faster than demand, we saw a drop in load factors from record highs. While the decline in North America is cause for caution, the global picture remains one of growth—meaning we urgently need to fix persistent supply chain issues and ensure airports and air traffic control can keep pace.”
Indeed, air travel today feels like a traffic jam with wings. Walsh’s remarks reflect a growing unease among operators: it’s not the absence of flyers, but the infrastructure bottlenecks—ground handling staff shortages, sluggish aircraft deliveries, and creaking air traffic control systems—that now threaten to clip the industry’s wings.
Asia-Pacific Lifts Off, Middle East and North America Lose Altitude
In the regional race for the skies, Asia-Pacific continues to set the pace. Airlines in this region recorded a robust 9.9% year-over-year surge in international passenger demand, easily outpacing the 11.6% capacity growth and achieving a decisive 84.1% load factor.
Contrast that with North America, where demand dipped by 0.1%—the second straight month of year-on-year contraction. Capacity still rose by 2.0%, resulting in load factors of 83%. While not catastrophic, it’s a sign that North American airlines might want to pause and reassess their growth strategies, or perhaps rethink those reclining seats that never really recline.
The Middle East fared no better. Demand dropped 1.0% while capacity grew 2.8%, sending load factors down to 74.6%—a full 2.9 percentage points below March 2024. Analysts attribute the slump partly to Ramadan’s calendar shift, which often dampens regional travel.
Europe, ever the steady performer, grew at 4.9% with a slightly more aggressive 6.9% increase in capacity. The result: a dip in load factor to 78.2%, but the continent remains a reliable market thanks to strong intra-European demand and rebounding long-haul traffic.
Latin America’s airlines, meanwhile, delivered one of the stronger showings with a 7.7% rise in demand—but with a whopping 12.1% boost in seat supply, the load factor slipped to 80.9%. Africa experienced a modest 3.3% increase in demand and continues to lag in efficiency, with a load factor of just 70.1%.
Domestic Skies: India’s Ascent, America’s Descent
Turning inward, domestic markets told a story of two worlds.
India led the way with an 11% jump in demand, supported by a booming middle class and aggressive airline expansion. Japan (8%) and Brazil (8.9%) also impressed, though not enough to lift the global domestic average above 0.9%. Yes, that’s correct—less than 1%.
The culprits? The United States and Australia. The US reported a 1.7% decline in domestic demand, while Australia experienced a 1.2% decline. In both cases, capacity rose or remained steady, further depressing load factors. Australia, notably, saw a 4.1% drop in domestic seat capacity, signalling a degree of course correction by local carriers.
Globally, domestic capacity grew 2.5%, but demand failed to keep pace. The average domestic load factor settled at 82%, a slight decrease from the previous year.
Flying Forward: More Seats, More Problems
There’s a delicate irony in the fact that global air travel demand is growing just enough to cause concern, but not fast enough to offset rising costs and overambitious seat expansion.
This dance of capacity versus demand has airlines juggling more than just carry-on baggage policies. A fuller aircraft doesn’t just mean more ticket sales—it means more strain on cabin crews, airport gates, security lines, and luggage belts that never quite seem to spit out your bag before it goes round twice.
As for the so-called “tariff turbulence” looming in North America and parts of Europe, IATA has stopped short of waving red flags—but you’d be hard-pressed to find a CEO in the sector who isn’t quietly tightening their seatbelt.
Still, despite these bumps in the clouds, global aviation remains aloft and—at least in the Asia-Pacific—soaring.
Regional Breakdown Summary (International RPK – March 2025)
| Region | RPK Growth | Capacity Growth | Load Factor | Change (ppt) |
|---|---|---|---|---|
| Asia-Pacific | +9.9% | +11.6% | 84.1% | -1.3 |
| Europe | +4.9% | +6.9% | 78.2% | -1.5 |
| Latin America | +7.7% | +12.1% | 80.9% | -3.3 |
| North America | -0.1% | +2.0% | 83.0% | -1.8 |
| Middle East | -1.0% | +2.8% | 74.6% | -2.9 |
| Africa | +3.3% | +3.5% | 70.1% | -0.2 |
