IATA: October pax demand, forward bookings signal recovery; air cargo shows signs of slowdown

The International Air Transport Association (IATA) announced that the recovery in air travel continued in October. Total traffic in October 2022 (measured in revenue passenger kilometres or RPKs) rose 44.6 percent compared to October 2021. Globally, traffic is now at 74.2 percent of October 2019 levels. Download the IATA October Passenger Market Analysis here. Domestic traffic for October 2022 slipped 0.8 percent compared to the year-ago period as stringent COVID-related travel restrictions in China dampened global figures. Total October 2022 domestic traffic was at 77.9 percent of the October 2019 level. Domestic forward bookings remain at around 70 percent of pre-pandemic level. International traffic climbed 102.4 percent versus October 2021. October 2022 international RPKs reached 72.1 percent of October 2019 levels with all markets recording strong growth, led by Asia-Pacific. Forward bookings for international travel increased to around 75 percent of pre-pandemic levels, following the re-openings announced by multiple Asian economies. IATA Director General Willie Walsh at the 2021 annual general meeting in Boston. (PHOTO: IATA) “Traditionally, by October we are into the slower autumn travel season in the Northern Hemisphere, so it is highly reassuring to see demand and forward bookings continuing to be so strong. It bodes well for the coming winter season and the ongoing recovery,” said Willie Walsh, IATA’s director general. International Passenger Markets Asia-Pacific airlines had a 440.4 percent rise in October traffic compared to October 2021, easily the strongest year-over-year rate among the regions, but off a very low 2021 base. Capacity rose 165.6 percent and the load factor climbed 39.5 percentage points to 77.7 percent. European carriers’ October traffic climbed 60.8 percent versus October 2021. Capacity increased 34.7 percent, and load factor rose 13.8 percentage points to 84.8 percent, second highest among the regions. Middle Eastern airlines saw a 114.7 percent traffic rise in October compared to October 2021. Capacity increased 55.7 percent versus the year-ago period, and load factor climbed 21.8 percentage points to 79.5 percent. North American carriers reported a 106.8 percent traffic rise in October versus the 2021 period. Capacity increased 54.1 percent, and load factor climbed 21.4 percentage points to 83.8 percent. Latin American airlines posted an 85.3 percent traffic rise compared to the same month in 2021. October capacity climbed 66.6 percent and load factor increased 8.7 percentage points to 86.0 percent, the highest among the regions. African airlines’ traffic rose 84.5 percent in October versus a year ago. October 2022 capacity was up 46.9 percent and load factor climbed 14.5 percentage points to 71.3 percent, the lowest among regions. Domestic Passenger Markets Australia almost tripled its October domestic traffic from last year (+292.9 percent); traffic  now stands at 15.8 percent below pre-pandemic levels. China’s domestic RPKs fell 58.7 percent in October and is now 69.4 percent below October 2019 levels. “People are enjoying the freedom to travel, and businesses recognise the importance of air transport to their success. A recent survey of European business leaders doing business across borders showed that 84 percent could not imagine doing so without access to air transport networks and 89 percent believed being close to an airport with global connections gave them a competitive advantage. Governments need to pay attention to the message that air travel is fundamental to how we live and work. That reality should drive policies to enable aviation to operate as efficiently as possible while supporting the industry’s 2050 Net Zero emission goals with meaningful incentives to encourage the production of Sustainable Aviation Fuels,” said Walsh. Headwinds continue to affect air cargo demand (PHOTO: Shutterstock) IATA also released data for October 2022 global air cargo markets showing that headwinds continue to affect air cargo demand. Global demand, measured in cargo tonne-kilometres (CTKs), fell 13.6 percent compared to October 2021 (-13.5 percent for international operations). Capacity was 0.6 percent below October 2021. This was the first year-on-year contraction since April 2022, however, month-on-month capacity increased by 2.4 percent in preparation for the year-end peak season. International cargo capacity grew 2.4 percent compared to October 2021. Download the IATA Cargo Market Analysis here. Several factors in the operating environment should be noted: ​​​​​​New export orders, a leading indicator of cargo demand, are shrinking in all markets except China and South Korea, which registered slightly higher new export orders in October. Latest global goods trade figures showed a 5.6 percent expansion in September, a positive sign for the global economy. This is expected to primarily benefit maritime cargo, with a slight boost to air cargo as well. The US dollar has seen a sharp appreciation, with the broad real effective exchange rate in September 2022 reaching the highest level since 1986. A strong dollar affects air cargo. As many costs are denominated in dollars, the currency’s appreciation adds another layer of cost on top of high inflation and high jet fuel prices. The Consumer Price Index increased slightly in G7 countries in October and remains at a decades’ high level of 7.8 percent. Inflation in producer (input) prices reduced by 0.5 percentage points to 13.3 percent in September. “Air cargo continues to demonstrate resilience as headwinds persist. Cargo demand in October — while tracking below the exceptional performance of October 2021– saw a 3.5 percent increase in demand compared to September. This indicates that the year-end will still bring a traditional peak-season boost despite economic uncertainties. But as 2022 closes out it appears that the current economic uncertainties will follow into the New Year and need continued close monitoring,” said IATA’s Walsh. October Regional Performance October 2022 (% year-on-year) World share1 CTK ACTK CLF (%-pt)2 CLF (level)3 Total Market 100.0% -13.6% -0.6% -7.4% 48.7% Africa 1.9% -8.3% -7.4% -0.4% 43.7% Asia Pacific 32.6% -14.7% -2.8% -7.8% 56.1% Europe 22.8% -18.8% -5.2% -9.3% 55.8% Latin America 2.2% -1.4% 19.2% -8.1% 38.4% Middle East 13.4% -15.0% 1.0% -9.0% 48.0% North America 27.2% -8.6% 2.4% -4.8% 40.1% 1 % of industry CTKs in 2021  2 Change in load factor   3 Load factor level Asia-Pacific airlines saw their air cargo volumes decrease by 14.7 percent in October 2022 compared to the same month in 2021. This was a decline in performance compared to September (-10.7 percent). Airlines in the region continue to be impacted by the war in Ukraine, and lower levels of trade and manufacturing activity due to Omicron-related restrictions in China. Available capacity in the region decreased by 2.8 percent compared to 2021. North American carriers posted an 8.6 percent decrease in cargo volumes in October 2022 compared to the same month in 2021. This was a decline in performance compared to September (-6.0 percent).  Capacity increased 2.4 percent compared to October 2021. European carriers saw an 18.8 percent decrease in cargo volumes in October 2022 compared to the same month in 2021. This was the worst performance of all regions and a decline in performance compared to September (-15.6 percent). This is attributable to the war in Ukraine. High inflation levels, most notably in Türkiye, also affected volumes. Capacity decreased 5.2 percent in October 2022 compared to October 2021. Middle Eastern carriers experienced a 15.0 percent year-on-year decrease in cargo volumes in October 2022. This was a marginal improvement to the previous month (-15.8 percent). Stagnant cargo volumes to/from Europe impacted the region’s performance. Capacity increased 1.0 percent compared to October 2021. Latin American carriers reported a decrease in demand of 1.4 percent in cargo volumes in October 2022 compared to October 2021. This was the strongest performance of all regions, however it still was a significant decline in performance compared to September (10.8 percent). This was the first decline in volumes since March 2021. Capacity in October was up 19.2 percent compared to the same month in 2021. African airlines saw cargo volumes decrease by 8.3 percent in October 2022 compared to October 2021. This was a significant decrease in the growth recorded the previous month (0.1 percent). Capacity was 7.4 percent below October 2021 levels. For Editorial Inquiries Contact: Editor Matt Driskill at [email protected] For Advertising Inquiries Contact: Head of Sales Kay Rolland at [email protected]