IATA - Passenger Demand Losing Momentum

• Asia-Pacific airlines’ June traffic increased 8.2% compared to the year-ago period. However, most of the growth relates to the strong upward trend in traffic seen in the final months of 2015 and into 2016, with June demand barely higher than in February. This could be a natural pause, but possibly is also a sign of Asian passengers being put off travel by terrorism in Europe. Capacity rose 7.3% and load factor inched up 0.6 percentage points to 78.2%.
• European carriers saw demand rise 2.1%, the smallest increase among regions, reflecting the negative impact of recent terrorism. While demand tends to recover reasonably quickly after such events, the repeated nature of the attacks may have a more lasting impact. Capacity climbed 3.4% and load factor slipped 1.1% percentage points to 83.3%.
• Middle Eastern carriers posted a 7.5% traffic increase in June, which was well down on the double-digit growth recorded earlier in the year. In part this could be owing to the timing of Ramadan, which tends to depress traffic growth Capacity rose 14.3%, which caused load factor to dive 4.4 percentage points to 69.9%.
• North American airlines’ demand rose 4.0% compared to June a year ago, which was well up on the 0.5% year-over-year growth recorded in May. Capacity climbed 4.7%, causing load factor to dip 0.6 percentage points to 84.3%, still the highest among regions.
• Latin American airlines experienced an 8.8% rise in demand compared to the same month last year, suggesting that carriers there have flown out of the soft patch seen in the first quarter. Capacity increased by 5.2% and load factor rose 2.7 percentage points to 82.4%.
• African airlines’ traffic climbed 4.7% in June, an indication that the strong upward trend in demand that began in the second half of 2015 has paused. Capacity rose 7.4%, with the result that load factor slipped 1.7 percentage points to 64.4%, lowest among regions.

• India continued to lead all markets with a 23.3% rise in domestic traffic, propelled by strong growth in real consumer spending as well as by the fact that airlines are adding airport pairs and frequencies.
• Australia’s airlines have operating fewer frequencies and down-gauging aircraft in recent months, contributing to a 3.6% decline in capacity. The result is that load factor surged 4.9 percentage points to 79.4% on a 2.8% increase in traffic,

• IATA (International Air Transport Association) represents some 260 airlines comprising 83% of global air traffic.
• You can follow us at http://twitter.com/iata2press for news specially catered for the media.
• All figures are provisional and represent total reporting at time of publication plus estimates for missing data. Historic figures June be revised.
• Domestic RPKs account for about 36% of the total market. It is most important for North American airlines as it is about 66% of their operations. In Latin America, domestic travel accounts for 47% of operations, primarily owing to the large Brazilian market. For Asia-Pacific carriers, the large markets in India, China and Japan mean that domestic travel accounts for 44% of the region’s operations. It is less important for Europe and most of Africa where domestic travel represents just 11% and 14% of operations respectively. And it is negligible for Middle Eastern carriers for whom domestic travel represents just 4% of operations.
• Explanation of measurement terms:
• RPK: Revenue Passenger Kilometers measures actual passenger traffic
• ASK: Available Seat Kilometers measures available passenger capacity
• PLF: Passenger Load Factor is % of ASKs used.
• IATA statistics cover international and domestic scheduled air traffic for IATA member and non-member airlines.
• Total passenger traffic market shares by region of carriers in terms of RPK are: Asia-Pacific 31.5%, Europe 26.7%, North America 24.7%, Middle East 9.4%, Latin America 5.4%, and Africa 2.2%.
• The economic and employment figures are quoted from the July 2016 update to the report Aviation Benefits Beyond Borders published by the Air Transport Action Group www.atag.org   

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