June 2025 Air Travel Demand Inches Up, Says IATA
Global air travel kept its recovery streak alive in June 2025, but momentum cooled as conflict-related reroutings and a sluggish U.S. market tempered growth. Industry-wide revenue passenger kilometers (RPK) edged 2.6 percent higher year over year, according to fresh IATA passenger data. International traffic outperformed domestic once again, yet capacity rose faster than demand, nudging load factors off May's record highs. Even so, the average seat flew 84.5 percent full-an historically strong showing that suggests tight cabins and firm fares will persist into August. Travelers eyeing peak-season flights should book sooner rather than later for the best options.
Key Points
- Why it matters: Tight capacity keeps fares elevated and choice limited.
- Global RPK grew 2.6 percent; capacity climbed 3.4 percent.
- Latin America led international growth at 9.3 percent.
- Domestic US air travel eked out a 0.1 percent gain after four monthly declines.
Snapshot
IATA's June scoreboard confirms the slowest monthly expansion of 2025 to date. International demand rose 3.2 percent, buoyed by strong leisure flows and pent-up long-haul traffic. Domestic demand lagged at 1.6 percent as mixed economic signals cooled bookings in several major markets. Capacity additions continued-up 4.2 percent internationally and 2.1 percent domestically-pulling the worldwide load factor down 0.6 points to 84.5 percent. Latin American carriers enjoyed the steepest international climb, while Asia-Pacific airlines added 7.2 percent in RPK despite softer China growth. North American and Middle Eastern airlines both posted modest contractions in international traffic.
Background
Air travel's rebound has been anything but linear. A blistering first-quarter surge cooled in May and slowed further in June amid rising geopolitical friction and uneven economic data. The war in Gaza forced costly detours across Middle Eastern airspace, trimming connectivity and discouraging discretionary trips. Higher fuel costs and currency volatility added pressure, prompting some carriers to trim non-core frequencies. Still, load factors remain near record territory, highlighting travelers' willingness to pay for limited seats. June's modest 0.1 percent uptick in domestic US air travel-its first positive result since February-offers a tentative sign that North America may be turning a corner after four months of softness documented in our July 12 coverage of air-traffic headwinds.
Latest Developments
Latin America Sets the Pace
Latin American airlines expanded international RPK by 9.3 percent year over year, handily outpacing every other region. Leisure demand to and within the Caribbean and robust VFR (visiting friends and relatives) traffic underpinned growth, while low-cost carriers unlocked new secondary city pairs. Capacity jumped 11.8 percent, trimming load factors slightly but preserving pricing power.
Domestic U.S. Market Finds a Floor
Domestic US air travel finally edged back into growth territory, up 0.1 percent in June. Though capacity rose 1.8 percent and the domestic load factor dipped 1.5 points to 86 percent, the market's sheer size helped lift total North American RPK back into positive numbers. Airlines credit a late-booking spike around Independence Day and improving corporate demand for the turnaround, but caution that sustained gains will hinge on macroeconomic stability.
Analysis
Two themes dominate June's data. First, persistent supply-demand tension continues to support yields. With just 1.8 percent global capacity growth scheduled for August, airlines appear determined to defend margins rather than chase share. Travelers should brace for high cabin factors and limited award inventory through Labor Day.
Second, regional divergence is widening. Latin America's expansion reflects favorable currency dynamics and pent-up outbound appetite, while Asia-Pacific's solid 7.2 percent rise underscores the region's faster reopening and growing middle-class propensity to fly. Europe's modest 2.8 percent gain suggests capacity saturation on short-haul routes, even as long-haul flights remain constrained by aircraft delivery delays.
North America and the Middle East tell a cautionary tale. Both regions saw international RPK decline-0.3 percent and 0.4 percent, respectively-as economic uncertainty and security reroutes weighed on bookings. The slight rebound in domestic US air travel is welcome, yet deeper gains will likely require stronger wage growth and clearer corporate travel budgets. For advisors, the lesson is clear: secure peak-season seats early, hedge currency exposure where possible, and monitor route announcements for last-minute shifts.
Final Thoughts
June's cooler numbers do not spell trouble for airlines-if anything, they reinforce disciplined capacity management that keeps cabins full and yields firm. Expect more of the same in July and August as carriers prioritize profitability over market share. For travelers, flexibility and early booking remain the smartest strategies in a market where supply still lags demand despite easing growth. Watch North America's domestic US air travel trend closely; its performance will set the tone for global capacity decisions heading into the winter season and shape the next chapter of June 2025 air travel demand.