Apac airlines fly 9% more passengers in February, but Iran war clouds outlook

[SINGAPORE] Asia-Pacific airlines carried 33 million international passengers in February 2026, an increase of 9 per cent year on year, according to preliminary traffic figures released by the Association of Asia Pacific Airlines (AAPA) on Monday (Mar 30).

International air passenger demand, measured in terms of revenue passenger kilometres, climbed 8.8 per cent on the year, while available seat capacity rose 8 per cent. This translated to a 0.7 percentage point increase in average international passenger load factor to 83.4 per cent for February.

The shorter month’s robust growth in international air passenger demand was supported by increased leisure travel during the Chinese New Year festive period, AAPA said.

Combined with January, this brings the number of international passengers carried by regional airlines in the first two months of 2026 to 69 million, said Subhas Menon, AAPA director general.

He noted that the improvement came amid “steady global economic growth” across both months, with “strong travel demand across Asian economies”, but added that regional airlines now face increased operating challenges amid escalating geopolitical tensions in the Middle East.

Menon said: “The rise in conflicts has reduced the availability of airspace, particularly along key Asia-Europe corridors, effectively constraining capacity on these routes and limiting network flexibility for affected carriers.”

“The sharp increase in jet fuel prices from an average of US$90 per barrel in the first two months of the year to an average of US$150 per barrel in the first three weeks of March, has left little time for airlines to adjust,” he said.

Longer flight routings have also increased operating costs, which places additional pressure on already thin profit margins, Menon noted.

Cargo demand

Despite traditional factory closures associated with the Chinese New Year festive season, international air cargo demand – measured in freight tonne kilometres – recorded “solid growth” for February, with an 8.7 per cent year-on-year increase.

“Demand growth outpaced a corresponding 8.3 per cent increase in offered freight capacity, resulting in a 0.3 percentage point rise in the average international freight load factor to 58.2 per cent,” AAPA said.

This came as trade activity remained resilient, reflecting demand for consumer, intermediate and investment goods, with volumes “underpinned by continued strength in e-commerce and demand for intermediate goods”, the association noted.

Menon said: “Positive business confidence, alongside rising orders for goods manufactured in Asia, supported growth in international air cargo demand, with volumes rising by a solid 7.6 per cent during the first two months of 2026, compared to the same period last year.”

Outlook

Looking ahead, Menon believes that the “broadly positive outlook” for the airline industry will continue to be clouded by the evolving geopolitical situation.

This comes as prolonged conflict in the Middle East may increase inflationary pressures, affecting business and consumer sentiment on both passenger and cargo markets.

“Close coordination between governments and industry stakeholders is critical to ensure the continued safe and efficient operation of air services, while maintaining global connectivity,” he said.