Interattivo
Our air traffic forecast is a comprehensive, forward-looking tool that incorporates macroeconomic growth, disposable income trends, and fuel costs. Extending to 2040, the forecast reflects the growing importance of strategic planning in an industry increasingly shaped by sustainability goals, market forces, and an emerging multipolar geopolitical landscape.
The war in Iran has introduced significant uncertainty into the near- and medium-term demand outlook. We are adjusting the frequency of our updates in response.
Key findings
Airline demand remains under pressure on both the supply and demand sides. On the supply side, elevated oil prices and wider crack spreads have raised unit costs, which airlines are passing on through sustained fare increases. As for demand, inflation and reduced disposable income continue to weigh on price-sensitive travel segments. The result is a shift in industry economics: For air travel, the cost of the war shows up primarily in volume and margin, not revenue. Airlines carry fewer passengers at compressed unit profitability, while higher fares partially sustain overall revenue. Over time, these pressures could gradually reshape demand patterns as travel preferences and price sensitivities evolve.
Demand scenario descriptions
We have refined our two scenarios—“gradual return” and “prolonged recovery”—as the war has progressed, updating their parameters to reflect the latest observed trajectory. Gradual return currently appears to be the more likely outcome, though meaningful uncertainty remains.
Gradual return: War-related impacts on travel demand persist through mid-2029, as regional tensions and elevated fares gradually ease.
Prolonged recovery: A deeper, more sustained conflict extends war-related impacts on travel demand through mid-2030, with fare and regional traffic effects lingering through the end of the decade.
Demand impacts
In both scenarios, global demand in 2030 and 2040 remains below the pre-conflict baseline, with the widest gap during the war and early recovery years. A modest structural shift in demand is also likely to persist beyond the immediate conflict period.
- Under the pre-conflict baseline, global revenue passenger kilometers (RPK) were projected to reach 138% of 2019 levels by 2030 and 180% by 2040. In the gradual return scenario, RPK falls to 128% of 2019 levels by 2030 before recovering to 175% by 2040. This effect is amplified in the prolonged recovery scenario: RPK reaches just 126% of 2019 levels by 2030 and recovers to 172% by 2040, with the gap to the pre-conflict baseline persisting through the mid-2030s.
- Cumulative demand loss from 2026 through 2030 varies considerably by scenario. Gradual return implies a meaningful five-year traffic shortfall vs. the pre-conflict baseline; prolonged recovery results in materially greater cumulative demand erosion over the same period, with effects persisting well into the 2030s.
Volume and margin, not revenue
A defining feature of the war’s impact is that the industry loses volume and margin even as revenue rises. As fuel and operating costs rise, airlines raise fares to cover the increase. On many key routes, passenger demand holds up enough that higher fares more than offset lower volume. Revenue under both scenarios actually rises above the pre-conflict baseline during the war, masking the underlying compression in passenger volume and unit margins. Seasonality is also expected to become more pronounced, with already-marginal winter routes more likely to be canceled or see reductions in frequency or gauge. The longer-term implication: Capacity decisions, fleet planning, and route economics may face significant pressure even as overall revenue appears strong.
Regional and corridor impacts
While the scenarios above reflect global aggregates, the effects will be most pronounced on routes touching the Persian Gulf region and adjacent markets. Europe–Asia corridors face elevated uncertainty due to rerouting requirements and fuel-cost exposure. Asia intraregional and North America intraregional markets, while not directly affected by airspace restrictions, feel the impact through a macroeconomic slowdown and elevated global fuel prices.
Despite these headwinds, Asia is expected to continue fueling global demand growth, with intraregional traffic projected to increase substantially through 2040 even after war-related impacts. China is expected to remain one of the fastest-growing markets.
Model limitations
Our model assumes that demand will find supply—an assumption that may not hold for certain routes over short periods. The model may not fully capture local supply shocks, currently driven by airport closures, jet fuel constraints, and proactive schedule reductions.
Projected market and financial information, analyses, and conclusions are based (unless sourced otherwise) on external information and Bain & Company’s judgment. They are intended as a guide only and should not be construed as definitive forecasts or guarantees of future performance or results. No responsibility or liability whatsoever is accepted by any person, including Bain & Company, Inc., or its affiliates and their respective officers, employees, or agents, for any errors or omissions.