Passenger demand moderates – IATA


Passenger demand moderates – IATA

Data released by the International Air Transport Association (IATA) showed global passenger demand in May measured in revenue passenger kilometers (RPKs) rose 4.6 percent compared to the same month in 2015, which was the same level achieved in April.

Capacity rose 5.5 percent, which pushed the average load factor down 0.7 percentage points to 78.7 percent. Demand for domestic traffic rose 5.1 percent, outpacing international demand growth of 4.3 percent, IATA said.

“After a very strong start to the year, demand growth is slipping back toward more historic levels. A combination of factors is likely behind this more moderated pace of demand growth. These include continuing terrorist activity and the fragile state of the global economy. Neither bode well for travel demand. And the shocks of Istanbul and the economic fallout of the Brexit vote make it difficult to see an early uptick,” said Tony Tyler, IATA’s outgoing director general and CEO.

Traffic at airlines in the Asia-Pacific region rose 5.1 percent in May compared to the year-ago period. Capacity increased 6.4 percent, which caused the load factor to slide 1 percentage point to 75.1 percent. Strong upward momentum has stalled in recent months with growth tracking sideways since the beginning of the year.

Domestic demand rose 5.1 percent in May compared to May 2015, IATA said, which was up from the 4 percent year-on-year growth recorded in April. “Results were decidedly mixed, with Brazil, Russia and Japan all showing declines. Domestic capacity climbed 4.4 percent, and load factor rose 0.5 percentage points to 81.7 percent.”

“The shockwaves of the Brexit vote have extended worldwide and the fallout will affect the air transport industry, from both economic and regulatory perspectives. Aviation plays a vital role in supporting economic growth and development. As the post-Brexit regulatory framework is negotiated between the EU and the UK it is critical that there are no steps backward for aviation connectivity,” said Tyler.

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