13 May 2025

Aviation Market Snapshot - Q1 2025

Our report examines the aviation sector, highlighting key insights, emerging trends, and significant developments. Growth in travel from emerging markets, especially China, has driven demand to an all-time high, reflecting a strong recovery and rising consumer affluence. However, it is important to recognize potential challenges ahead. We hope you find the insights in this report valuable for navigating this rapidly changing landscape.

Download the full Q1 Aviation market report PDF 5.78 MB

2.6%

year-in-year increase in International Revenue Passenger Kilometres (RPK)

Slower Growth from a High Base in February

The total Revenue Passenger-Kilometre (RPK) for the industry experienced a year-on-year (YoY) increase of 2.6% in February, marking a deceleration from previous months. This slowdown is largely attributed to the Lunar New Year celebrations occurring in January this year, unlike February of the previous year.
The Passenger Load Factor (PLF) reached 81.1% across the industry, setting a new record for February. However, the PLF trends diverged between domestic and international flights.
Current flight schedules suggest that March and April will witness higher traffic levels compared to previous years.
Domestic traffic saw a contraction of 1.9% YoY, primarily due to a slowdown in the US and PR China, the two largest domestic markets.
In contrast, international RPK grew by 5.6% YoY, although all regions reported lower growth rates, most still achieved record traffic levels.

Traffic Growth Trends and Load Factors

In February 2024, passenger traffic had surged by 21.2% YoY, leading to remarkable growth across all regions. The reduced growth rates observed in February 2025 can be partly attributed to the exceptionally high figures from the previous year, creating a challenging comparison base. Again as impact of the Lunar New Year being celebrated in February 2024 and 2024 being a leap year has impacted on these numbers.

As of March 2025, the number of scheduled flights globally is higher than in previous years, indicating confidence in future growth aligned with recent observations.

International passenger traffic rose by 5.6% YoY, achieving a record-high load factor of 80.2% in February. Conversely, domestic traffic declined by 1.9% compared to the previous year, accompanied by a lower load factor. These trends suggest a potential softening of demand for domestic air travel in key markets.

Derek Wong, Head of Aviation Debt Funds

The unsettled macroeconomic environment has started to translate into softer growth for airlines, particularly in terms of forward bookings in the US (domestic corporate, government and economy leisure), Canada (transborder) and transatlantic markets. Nonetheless this is coming off strong growth rates post-Covid and the overall expectation for 2025/2026 remains one of positive growth.

Total Industry Cargo Demand Marginally Down

February, global Cargo-Tonne-Kilometres (CTK) experienced a slight decline of 0.1% year-on-year (YoY). When adjusted for seasonality, demand fell by 0.6% compared to January 2025, although it remains 3.0% higher than the levels recorded in 2024.
International CTK saw a modest increase of 0.4%, primarily driven by airlines in the Asia Pacific region.
Global air cargo capvacity, measured in Available Cargo Tonne Kilometres (ACTK), decreased by 0.4% YoY. Consequently, the Cargo Load Factor (CLF) improved slightly, rising by 0.1 percentage points from February 2024, reaching 45.0%.
Jet fuel prices saw a minor decline of 2.1% month-on-month (MoM). In contrast, global air cargo yield fell by 6.1% MoM, hitting a 12-month low.

Industry Overview and Recent Trends

The air cargo industry reached its peak in October 2024, recording 24.4 billion Cargo-Tonne-kilometres (CTK), but has since entered a phase of gradual deceleration. Seasonal factors have played a role in this trend, as air cargo volumes typically rise during the winter months and subsequently decline after the holiday shopping season.
Despite positive year-on-year (YoY) growth rates through January, when volumes exceeded those of the previous year, this trend reversed in February. Global air cargo demand slipped by 0.1% YoY, marking the first decline since mid-2023. On a month-on-month (MoM) basis, when adjusted for seasonality, demand fell by 0.6% from January.
It is important to note that February 2024 benefited from an extra day due to it being a leap year, which complicates direct comparisons. After adjusting for seasonality and accounting for the difference in the number of days, air cargo traffic in February 2025 is 3.0% higher than in February 2024, aligning closely with January’s growth rate.
Broader macroeconomic pressures have contributed to these headwinds, particularly rising global trade tensions. Additionally, policy volatility under the new US administration has further dampened business confidence and disrupted international commerce. More detail will be available in next quarter’s report.

Download the full Q1 Aviation market report PDF 5.78 MB

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