Global airline capacity declined in March, with weakness concentrated in international travel as geopolitical tensions weighed on demand, according to research from UBS.
European capacity fell 3% year-on-year, driven largely by declines in international traffic due to the war in the Middle East, after growth had been flat in February.
The slowdown was broad-based across the region. Capacity in the UK and France declined 4% year-on-year, while Germany fell 6%. Southern European markets proved more resilient, though Spain slowed to flat growth and Italy to 1%.
US capacity also weakened, declining 2% year-on-year after a flat prior month. International routes were again the main drag, falling 5%, while domestic traffic held up.
By contrast, China remained a bright spot. Capacity growth was stable at around 10% year-on-year, supported by stronger domestic demand offsetting weaker international trends.
UBS said its airline traffic monitor, which tracks flights and seat capacity globally, provides an early indication of revenue trends before companies report results.
The data suggests that while demand remains intact in some regions, international travel has been sensitive to geopolitical disruption, though shares in airlines were higher on the day the note was released after the US and Iran agreed a two-week ceasefire in order to hold peace talks.