Strong 2025 Passenger Demand Masks Ongoing Capacity Constraints for Airlines

Global passenger demand surged strongly in 2025, but airlines continued to face capacity constraints that limited growth and pressured operations.

Passenger Demand:
- Revenue Passenger Kilometers (RPKs) grew 9.3% year-on-year, outpacing long-term averages.
- December 2025 demand rose 7.5%, showing sustained momentum.

Capacity (ASKs):
- Grew 7.2% year-on-year, lagging behind demand.
- December 2025 capacity increased 6.8%, still below demand growth.

Load Factor:
- Full-year average reached 83.6%, a record high.
- December load factor stood at 82.9%, reflecting tight supply-demand balance.

Regional Trends
- Asia-Pacific: Strongest growth at +14.8% demand, driven by China reopening and intra-Asia travel.
- Europe: Demand up +8.2%, supported by tourism and business travel recovery.
- North America: Grew +6.1%, steady but slower compared to Asia.
- Middle East: Demand up +9.5%, boosted by hub carriers expanding long-haul connectivity.
- Latin America & Africa: Moderate growth (+7.0% and +6.5% respectively).

Drivers of Demand
- Pent-up Travel: Continued recovery from pandemic-era restrictions.
- Tourism & Leisure: Strong international leisure travel, especially to Asia and Europe.
- Business Travel: Gradual rebound, though still below pre-pandemic levels in some regions.
- Airline Strategies: Expanded route networks and competitive fares stimulated demand.

✅ Summary: 2025 was a record year for passenger demand, but airlines struggled to keep pace with capacity. This mismatch drove record load factors and highlighted structural challenges in fleet growth, staffing, and infrastructure. Looking ahead, 2026 will likely see moderated demand growth, with capacity expansion hinging on aircraft deliveries and operational resilience.