Passenger traffic growth declines as demand rises

Global passenger traffic results for September have shown a decline in growth, with demand rising by 5.5 per cent compared to 6.4 per cent recorded the same month in 2017.

The International Air Transport Association (IATA), in the report recently released, estimated that impacts from severe hurricane and typhoon activity in September shaved around 0.1-0.2 percentage point off expected growth.

However, even after accounting for these impacts, monthly traffic demand was below the 6.7 per cent year-to-date pace.

IATA’s Director General and Chief Executive Officer (CEO), Alexandre de Juniac, said while September’s traffic growth was in line with the long-term average, it represents a moderation compared to recent months.

“This is likely owing to the anticipated reduced demand boost from lower airfares due to rising airline cost pressures, particularly fuel. Heightened uncertainty about trade policies and mounting protectionist policies may also be having an impact,” de Juniac said.

According to IATA, the International Revenue Passenger Kilometres (RPKs) climbed 4.9 per cent, with airlines in all regions recording growth compared to 2017. Total capacity climbed 5.1 per cent, and load factor dipped 0.1 percentage point to 81.2 per cent.

Asia-Pacific airlines’ traffic rose 5.4 per cent in September compared to the year-ago period. This was down from 7.4 per cent annual growth in August.

The steep decline in part reflects the impacts of typhoon activity in the region including the multi-day closure of Kansai International Airport. Capacity increased 4.3 per cent, and load factor climbed 0.9 percentage point to 79.2 per cent.

European carriers saw September RPKs rise 5.2 per cent over September 2017, in line with August growth of 5.4 per cent. However, the upward trend in seasonally-adjusted demand has slowed considerably since early 2018.

Capacity climbed 4.9 per cent and load factor edged up 0.2 percentage point to 87.0 per cent, which was the highest among regions.

Middle East carriers had a 1.8 per cent rise in demand, which was a four-month low. As in previous months, the volatility in the region’s growth rate mainly reflects the developments in 2017 such as the cabin ban on large portable electronic devices and the proposed travel bans to the U.S. Capacity rose 5.3 per cent, and load factor fell 2.4 percentage points to 72.3 per cent.

African airlines posted a 6.0 per cent rise in RPKs in September, down from 6.8 per cent in August. Capacity rose 4.9 per cent and load factor edged up 0.8 percentage point to 74.6 per cent.

The healthy growth is taking place against an increasingly challenging economic backdrop for the region’s largest economies, South Africa and Nigeria.

It will be recalled that IATA, last month, released its latest passenger forecast showing that demand for air travel could double to 8.2 billion passengers in 2037. Aviation already supports 65.5 million jobs and has an economic impact of $2.7 trillion.

IATA’s boss said: “With growth comes the opportunity to make an even bigger contribution to global well-being. But governments need to start preparing by investing in adequate airport and airspace infrastructure to support rising demand for connectivity.

“The recent decision to cancel construction of the much-needed new airport for Mexico City is a backward step that will have negative economic ramifications not only for Mexico’s economy, but also for connectivity options across the Latin American region.

“Aviation is the business of freedom. It improves lives and livelihoods and makes the world a better place. But to grow the benefits of aviation, governments need to do their part, by providing sufficient airport and airspace capacity, at an affordable price, and at a quality aligned with our technical and commercial needs,” said de Juniac.