Conflict in the Middle East and the spike in fuel prices have resulted in Southeast Asia capacity falling up to 11% in Jun, figures from OAG show.
Capacity fell more than 6% last month and fares across most of the main markets are up by 5%-10% on average, reflecting the drop in capacity, it says.
Fares in Malaysia are up 11% this month and from Singapore are up 10% on the same month last year. In the six weeks mid-Apr to late May, 5.2 million seats (4.8% of the season’s capacity) were cut from Southeast Asia’s schedule for May-Oct.
At the start of the 2026 northern summer season, international capacity had been expected to reach 109 million seats, representing 4.6% growth compared to the same period last year.
But with the recent capacity changes, it is now expected to total 103.9 million seats, which is 0.4% below 2025 (assuming no further capacity reductions), says OAG. Over 80% of those reductions (4.2 million seats) are between May and Jul.
The countries seeing the largest reductions are Thailand and Malaysia, with over one million fewer seats each.
”What is interesting is that the bulk of these capacity reductions from Southeast Asia are for travel within Asia, reflecting perhaps the impact of the crisis in the Middle East on both fuel prices and the cost of living,” OAG adds.
Airlines have just shaken off the lasting impacts of the pandemic in the early 2020s, and are seeing growth in international markets both within and beyond South East Asia. “This latest crisis looks set to create continued uncertainty for some time to come,” says the company.
. . . Demand Down
IATA’s figures for April show the conflict pushed down total demand, measured in revenue passenger kilometres by -3.4% compared to 2025.
Excluding the Middle East, demand increased by 1.2%. Total capacity, measured in available seat kilo metres, fell by 2.9% year-on-year. The load factor was 83.1% (down 0.4 on Apr 2025).
“The 46.6% fall in demand for carriers in the Middle East due to war in the region was so acute that it dragged overall demand down -3.4%. The situation for air transport remains highly vola tile,” says IATA’s director general Willie Walsh.
