2026 began with 3.8% air passenger growth, fares expected to fall: IATA

2026 began with a 3.8 per cent increase in air passenger demand, said the International Air Transport Association (IATA), releasing its January data.

Total demand, measured in revenue passenger kilometres (RPK), was up 3.8 per cent compared to January 2025 while total capacity, measured in available seat kilometers (ASK), increased 3.5 per cent year-on-year, IATA said.

The load factor was 82.0 per cent – “a record high for January,” the organization said.

International demand rose 5.9 per cent compared to January 2025. Capacity was up 5.8 per cent year-on-year, and the load factor was 82.5 per cent.

Domestic demand increased 0.1 per cent compared to January 2025. Capacity was down -0.4 per cent year-on-year. The load factor was 81.2 per cent.

North American carriers, for one, saw a 3.4 per cent year-on-year increase in demand, IATA said.

Capacity also increased 2.6 per cent year-on-year, and the load factor was 82.3 per cent (+0.6 ppt compared to January 2025).

Demand skewed by shift in Lunar New Year

January demand was skewed by a shift in the Lunar New Year from January in 2025 to February in 2026, IATA noted.

“Lunar New Year typically drives a spike in demand, as families reconnect to celebrate the holiday,” the association said. “The year-on-year comparison has the effect of making January 2026 demand appear slightly weaker.”

The timing of the Lunar New Year partly explains the slightly slower 3.8 per cent expansion in January, “but the fundamentals are in place for demand to continue strong growth in 2026,” said Willie Walsh, IATA’s director general, in a statement.

“Schedule data, for example, indicate a 5.2 per cent increase in global seat capacity by March, which would be the fastest expansion since April 2024. Events over the weekend have, however, introduced some uncertainty into the evolution of traffic and fuel costs.”

“We all hope for an early peaceful resolution to the current hostilities. In the meantime, it is critical that states respect their obligation to keep civilians, and civil aviation free from harm,” he said.

Average fares expected to fall

Average fares are also expected to fall in real terms over the course of 2026, continuing the trend of more affordable air travel, Walsh said.

“This is despite persistent cost pressures from rising infrastructure charges, onerous regulatory burdens, and the mounting cost of the energy transition,” he said. “In the face of these cost and regulatory pressures, it is notable that 2025 saw the slowest rate of new airline start-ups since 1999.”

“Governments who value competition should consider this a canary in the coal mine. To protect and enhance the consumer benefits of connectivity, these cost and regulatory issues must be addressed.”

Don't miss a single travel story: subscribe to PAX today!  Click here to follow PAX on Facebook.