Data released earlier this month by the International Air Transport Association (IATA) showed demand for passenger traffic (revenue passenger kilometres or RPKs) rose by 4.2 percent compared to the full year of 2018. That was a slowdown compared to 2018’s annual growth of 7.3 percent and marked the first year since the global financial crisis in 2009 with passenger demand below the long-term trend of around 5.5 percent annual growth. Full-year 2019 capacity climbed 3.4 percent, and the load factor rose 0.7 percentage point to a record high of 82.6 percent. The previous high was 81.9 percent set in 2018.
“Airlines did well to maintain steady growth last year in the face of a number of challenges. A softer economic backdrop, weak global trade activity, and political and geopolitical tensions took their toll on demand. Astute capacity management, and the effects of the 737 MAX grounding, contributed to another record load factor, helping the industry to manage through weaker demand and improving environmental performance,” said Alexandre de Juniac, IATA’s director general and CEO. The year “2019 was a difficult year for aviation and 2020 is off to a tragic and challenging beginning…Today, headlines are also focused on the novel coronavirus. From our experience of past outbreaks, airlines have well-developed standards and best practices to keep travel safe. And airlines are assisting the World Health Organisation (WHO) and public health authorities in efforts to contain the outbreak in line with the international health regulations. There currently is no advice from WHO to restrict travel or trade. But it is clear that demand has fallen on routes associated with China, and airlines are responding to this by cutting capacity for both domestic and international China. The situation is evolving fast, but we are observing significant schedules adjustments for February.” said de Juniac.
International Passenger Markets
In 2019, international passenger traffic climbed 4.1 percent compared to 2018, down from 7.1 percent annual growth the year before. Capacity rose 3 percent and load factor edged up 0.8 percentage point to 82 percent.
Asia-Pacific airlines’ full-year traffic increased 4.5 percent in 2019, which was a large decline compared to 8.5 percent growth in 2018. This reflected the impact of the US-China trade war as well as weakening business confidence and economic activity. Capacity rose 4.1 percent, and load factor ticked up 0.3 percentage point to 80.9 percent.
European carriers saw a 4.4 percent traffic rise in 2019, which was down from 7.5 percent annual growth in 2018. Capacity rose 3.7 percent and load factor increased 0.6 percentage point to 85.6 percent, which was the highest for any region. The lowered results are attributable to generally slowing economic activity; declining business confidence, compounded by industrial disputes (strikes); Brexit uncertainty and the collapse of a number of airlines.
Middle Eastern airlines’ passenger demand increased 2.6 percent last year, the slowest pace of expansion among all regions and down from 4.9 percent growth in 2018. However, demand began to recover in the fourth quarter and the monthly growth of 6.4 percent in December led all regions. Annual capacity climbed 0.1 percent and load factor surged 1.8 percentage points to 76.3 percent.
North American airlines saw traffic growth slow to 3.9 percent last year, down from 5 percent in 2018, amid softer US economic activity and weaker business confidence compared to 2018. Capacity climbed 2.2 percent, and load factor strengthened 1.3 percentage points to 84 percent, second-highest among the regions. This year North American carriers have been hurt by cutting flights to China.
Latin American airlines’ traffic climbed 3 percent in 2019, a dramatic slowdown compared to 7.5 percent annual growth in 2018. Capacity rose 1.6 percent and load factor increased by 1.1 percentage points to 82.9 percent. The year was impacted by social unrest and economic difficulties in a number of countries in the region.
African airlines led all regions with a 5 percent demand increase, down from 6.3 percent growth recorded for 2018. Capacity rose 4.5 percent, and load factor edged up 0.3 percentage point to 71.3 percent. Airlines in the region benefitted from a generally supportive economic backdrop in 2019 as well as increases in air transport connectivity.
Domestic Passenger Markets
Domestic air travel climbed 4.5 percent in 2019, which was down from 7.8 percent in 2018. All markets showed annual growth, led by China and Russia. Capacity rose 4.1 percent and load factor was 83.7 percent, up 0.4 percent percentage point compared to 2018.
China’s airlines saw domestic passenger traffic expand by 7.8 percent in 2019, the slowest pace since the global financial crisis. Softer economic activity amid the US-China trade war, compounded by weaker consumer spending and unrest in Hong Kong all contributed to the slowdown. Looking into early 2020, any positive impacts of the ‘phase one’ trade agreement with the US likely will be countered by the impact of the coronavirus outbreak.
Indian airlines’ four years of double-digit demand growth came to a halt in 2019, as traffic rose 5.1 percent, down from 18.9 percent in 2018. The bankruptcy of Jet Airways and weakening economic activity were the main culprits of the slowdown.