Passenger traffic surges by 7.3%, boosts business confidence

International Air Transport Association (IATA) has announced global passenger traffic results for November 2017 showing continued robust demand and boost for business confidence in the New Year.

Total Revenue Passenger Kilometers (RPKs), according to IATA, rose by 8.0 per cent compared to November 2016, the fastest growth rate in five months and up from a 7.3 per cent year-over-year rise in October.

Capacity (available seat kilometers or ASKs) also increased by 6.3 per cent, and load factor rose 1.2 percentage points to 80.2 per cent.

IATA’s Director General and Chief Executive Officer (CEO), Alexandre de Juniac, said the airline industry is in a good place entering 2018.

De Juniac said: “November’s strong demand gives the industry momentum. The number of unique city-pair connections now tops 20,000. Passengers not only have more travel choices than ever, the cost of travel in real terms has never been cheaper.

“Along with delivering great value to consumers, airlines are rewarding their shareholders with normal levels of profitability. We expect 2018 to be the fourth year in a row where the industry’s return on invested capital will exceed the cost of capital. In sum, we begin the New Year with confidence.

“Challenges, however, remain. Security threats continue. Infrastructure issues persist. Fees and charges are a growing part of the cost base. And in many cases airports and air traffic management struggle to keep pace with demand and technology advancements. These and other challenges can only be addressed in partnership with governments. And doing so requires governments to recognise the enormous value that aviation—the business of freedom—provides to their economies and the world,” he said.

According to IATA’s fact sheet, November international passenger demand rose 8.1 per cent compared to the year earlier period, an increase from 7.3 per cent in October. All regions showed growth, led for the third consecutive month by carriers in the Asia-Pacific region. Total capacity climbed 6.6 per cent, and load factor increased 1.1 percentage points to 78.2 per cent.

African airlines experienced a 7.9 per cent rise in demand compared to November 2016. Volumes have started to trend upwards strongly again in seasonally-adjusted terms in recent months, in line with an improvement in business confidence in key economies including Kenya and Nigeria. Indicators in South Africa, by contrast, are still consistent with falling economic activity. Capacity rose 3.7 per cent and load factor climbed 2.7 percentage points to 68.3 per cent.

Asia-Pacific airlines’ November traffic climbed 10.8 per cent compared to the year-ago period, driven by strong regional economic growth and continuing expansion of options for travelers. Capacity increased 8.7 per cent and load factor rose 1.5 percentage points to 78.6 per cent.

European carriers saw demand increase by 7.9 per cent in November 2017.

Economic conditions in the region remain very favourable, with business confidence recently having risen to its strongest level in seven years. Capacity climbed 6.2 per cent and load factor rose 1.3 percentage points to 81.9 per cent, which was tied with Latin America as the highest load factor among the regions.

Middle East carriers had a 4.9 per cent demand increase, which was the lowest among the regions. The market segment to and from North America continues to be affected by the now-lifted ban on personal electronic devices, as well as a wider impact stemming from the proposed travel restrictions to the US from certain countries. Capacity rose 4.3 per cent and load factor lifted 0.4 percentage point to 70.1 per cent.

North American airlines’ traffic climbed 6.4 per cent, in November. Capacity rose 6.1 per cent and load factor edged up 0.2 percentage point to 79.1 per cent. The relatively vigorous economic backdrop is supporting outbound passenger demand, but this appears partly to be offset by a negative impact on inbound travel to the United States from the additional security measures involved with traveling there.

Latin American airlines’ November traffic climbed 7.2 per cent compared to November 2016. This was broadly in line with the region’s five-year average growth rate, although on a seasonally-adjusted basis, volumes are still below the peak level reached in July 2017. Capacity also increased by 7.2 per cent, keeping load factor flat at 81.9 per cent.