The International Air Transport Association (IATA) announced strong demand growth in air travel for March 2023. Total traffic in March 2023 (measured in revenue passenger kilometres or RPKs) rose 52.4 percent compared to March 2022. Globally, traffic is now at 88.0 percent of March 2019 levels. Domestic traffic for March rose 34.1 percent compared to the year-ago period. Total March 2023 domestic traffic was at 98.9 percent of the March 2019 level. International traffic climbed 68.9 percent versus March 2022 with all markets recording healthy growth, led once again by carriers in the Asia-Pacific region. International RPKs reached 81.6 percent of March 2019 levels while the load factor at 81.3 percent exceeded the March 2019 level by 10.1 percentage points.
Download the IATA March passenger market analysis here.
“The calendar year first quarter ended on a strong note for air travel demand. Domestic markets have been near their pre-pandemic levels for months. And for international travel two key waypoints were topped. First, demand increased by 3.5 percentage points compared to the previous month’s growth, to reach 81.6 percent of pre-COVID levels. This was led by a near-tripling of demand for Asia-Pacific carriers as China’s re-opening took hold. And efficiency is improving as international load factors reached 81.3 percent. Even more importantly, ticket sales for both domestic and international travel give every indication that strong growth will continue into the peak Northern Hemisphere summer travel season,” said Willie Walsh, IATA’s director general.
“As traveller expectations build towards the peak Northern Hemisphere summer travel season, airlines are doing their best to meet the desire and need to fly. Unfortunately, a lack of capacity means that some of those travellers may be disappointed. Part of this capacity shortfall is attributable to the widely reported labour shortages impacting many parts of the aviation value chain, as well as supply chain issues affecting the aircraft manufacturing sector that is resulting in aircraft delivery delays. However, a significant share of recent flight cancellations, primarily in Europe, are owing to job actions by air traffic controllers and others. These irresponsible actions resulted in thousands of unnecessary cancellations in March. This is unacceptable and should not be tolerated by the authorities,” said Walsh.
International Passenger Markets
- Asia-Pacific airlines had a 283.1 percent increase in March 2023 traffic compared to March 2022, continuing the robust momentum since the lifting of travel restrictions in the region. Capacity rose 161.5 percent and the load factor increased 26.8 percentage points to 84.5 percent, the second highest among the regions.
- European carriers posted a 38.5 percent traffic rise versus March 2022. Capacity climbed 27.0 percent, and load factor rose 6.6 percentage points to 79.4 percent, which was the second lowest among the regions.
- Middle Eastern airlines saw a 43.1 percent traffic increase compared to March a year ago. Capacity climbed 30.5 percent and load factor pushed up 7.0 percentage points to 79.4 percent.
- North American carriers’ traffic climbed 51.6 percent in March 2023 versus the 2022 period. Capacity increased 34.0 percent, and load factor rose 9.8 percentage points to 84.8 percent, the highest among the regions.
- Latin American airlines had a 36.5 percent traffic increase compared to the same month in 2022. March capacity climbed 33.4 percent and load factor rose 1.9 percentage points to 82.8 percent.
- African airlines’ traffic rose 71.7 percent in March 2023 versus a year ago, the second highest among the regions. March capacity was up 56.2 percent and load factor climbed 6.5 percentage points to 72.2 percent, lowest among the regions.
Domestic Passenger Markets
- Brazil’s domestic traffic rose 8.0 percent in March compared to a year ago and is now just fractionally below pre-pandemic levels.
- Indian airlines’ domestic demand climbed 20.3 percent in March and was 10.0 percent above the March 2019 levels.
Air cargo declines moderate in March
IATA also released data for March 2023 global air cargo markets showing a continued decline against previous year’s demand performance. This trend began in March 2022. Global demand, measured in cargo tonne-kilometres (CTKs), fell 7.7 percent compared to March 2022 (-8.1 percent for international operations). This was a slight improvement over the previous February’s performance (-9.4 percent) and half the rate of annual decline seen in January and December (-16.8 percent and -15.6 percent respectively). At this point, it is unclear if this is a potentially modest start of an improvement trend or the upside of market volatility. Irrespective of this, March performance slipped back into negative territory compared to pre-COVID levels (-8.1 percent). Capacity (measured in available cargo tonne-kilometres, ACTK) was up 9.9 percent compared to March 2022. The strong uptick in ACTKs reflects the addition of belly capacity as the passenger side of the business continues to recover.
Download the IATA March air cargo analysis here.
Several factors in the operating environment should be noted:
- Even with record low unemployment rates, the global economy continues to decelerate due to a combination of factors such as tightening global financial conditions, high levels of global debt, and supply chain problems including those linked to the war in Ukraine.
- In line with the weakening global trade, the Purchasing Manager Indices (PMIs) for new export orders at the global level remained below the 50-critical line for a full year as of March. China’s PMI retreated to below the 50-mark in March, following a slight improvement observed in February.
- The PMI for supplier delivery times indicates high inventory levels, which tends to have a negative impact on air cargo.
- Global goods trade decreased by 2.6 percent in February; this was a faster rate of decline than the previous month of -1.0 percent.
“Air cargo had a volatile first quarter. In March, overall demand slipped back below pre-COVID-19 levels and most of the indicators for the fundamental drivers of air cargo demand are weak or weakening. While the trading environment is tough, there is some good news. Airlines are getting help in managing through the volatility with yields that have remained high and fuel prices that have moderated from exceptionally high levels. Looking ahead, with inflation reducing in G7 countries policy makers are expected to ease economic cooling measures and that would stimulate demand,” said Walsh.
March Regional Performance
- Asia-Pacific airlines saw their air cargo volumes decrease by 7.3 percent in March 2023 compared to the same month in 2022. This was a slight decrease in performance compared to February (-5.4 percent). The drop in demand suggests that air cargo traffic in the region has not yet stabilised following China’s reopening in January. Available capacity in the region increased by 23.6 percent compared to March 2022 as more belly capacity came online from the passenger side of the business.
- North American carriers posted the weakest performance of all regions with a 9.4 percent decrease in cargo volumes in March 2023 compared to the same month in 2022. This was a decrease in performance compared to February (-10.3 percent). The transatlantic route between North America and Europe saw traffic declining at an accelerated pace throughout March. Capacity increased 0.4 percent compared to March 2022.
- European carriers saw the most substantial improvement in demand in March over the previous month. Airlines in the region saw their air cargo volumes decrease by 7.8 percent in March 2023 compared to the same month in 2022. This was an improvement in performance versus February (-15.9 percent). Airlines in the region continue to be most affected by the war in Ukraine. Capacity increased 8.8 percent in March 2023 compared to March 2022.
- Middle Eastern carriers experienced a 5.5 percent year-on-year decrease in cargo volumes in March 2023. This was also an improvement to the previous month’s decline (-7.1 percent). The demand on Middle East-Europe routes has been trending upward in recent months. Capacity increased 9.7 percent compared to March 2022.
- Latin American carriers had the strongest performance of all regions in March despite posting a decline in performance over the previous month. Carriers in the region reported a 5.3 percent decrease in cargo volumes in March 2023 compared to March 2022. This was a drop in performance compared to February which saw a 2.9 percent decrease. Capacity in March was up 12.9 percent compared to the same month in 2022.
- African airlines saw cargo volumes decrease by 6.2 percent in March 2023 compared to March 2022. This was an improvement in performance compared to the previous month (-7.4 percent). Notably, Africa to Asia routes experienced significant cargo demand growth in March. Capacity was 4.1 percent below March 2022 levels.
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