IATA reports “solid” growth in July 2018, slaps EU AT controllers
The International Air Transport Association (IATA) reports growth of passenger demand in all regions in July 2018. Total revenue passenger kilometers (RPKs) rose 6.2% in comparison to July 2017, while available seat kilometers (ASKs) increased by 5.5% and load factor rose to 85.2%. Despite positive results, the association still expects rising fuel costs to have a negative effect on market growth.
“The industry posted another month of solid traffic growth. And the record load factor shows that airlines are becoming even more efficient in terms of deploying capacity to meet demand. However, rising costs -- particularly fuel -- will likely limit the stimulus we would expect from lower airfares. Therefore, we do expect to see a continued slowing of growth compared to 2017,” Alexandre de Juniac, IATA’s Director General and CEO is quoted saying in a statement.
A slap to EU air traffic controllers
Despite a “solid start” of the send half of 2018, IATA points out that the summer peak time was disturbed in Europe by delays “and disappointment” partly because “air traffic capacity has not kept pace with demand”.
However, de Juniac sees other “bottlenecks” of European airspace, calling for authority bodies and ATC providers to take urgent action against air traffic controllers’ strikes. “. It’s past time for the European Commission, Member States and air navigation service providers to take urgent action to eliminate European airspace bottlenecks and to discourage air traffic controllers from penalizing air travelers when they are unhappy over a contract,” said de Juniac.
July international passenger demand rose 5.3% compared to July 2017, which was a deceleration compared to the 8.2% growth recorded in June. Total capacity climbed 4.7%, and load factor edged up half a percentage point to 85.0%. All regions reported growth, led by Asia-Pacific for the first time in three months.
Asia-Pacific airlines’ July traffic rose 7.5% over the year-ago period, a slowdown compared to June growth of 9.6%. Capacity increased 6.0% and load factor rose 1.1 percentage points to 82.1%. Growth is being supported by a combination of robust regional economic growth and an increase in route options for travelers.
European carriers posted a 4.4% rise in traffic for July compared to a year ago, down from 7.1% annual growth in June. On a seasonally-adjusted basis, passenger volumes have been tracking sideways for the past three months, reflecting mixed developments on the economic front and possible traffic impacts related to air traffic control strikes across the region. Capacity rose 3.9%, and load factor climbed 0.5 percentage point to 89.1%, highest among the regions.
Middle East carriers had a 4.8% increase in demand for July, well down on the 11.2% growth recorded for June, although this mainly is attributable to volatility in the data a year ago, rather than any major new developments. The region has been negatively impacted by a number of policy measures over the past 18 months, including the ban on portable electronic devices and travel restrictions. July capacity climbed 6.5% compared to a year ago and load factor dropped 1.3 percentage points to 80.3%.
North American airlines’ traffic climbed 4.1% compared to July a year ago. This was down from 6.0% growth in June, but still ahead of the 5-year average pace for carriers in the region as strong momentum in the US economy is helping underpin a pick-up in international demand for airlines there. July capacity rose 2.8% with the result that load factor climbed 1.1 percentage points to 87.2%, second highest among the regions.
Latin American airlines experienced a 3.8% rise in traffic in July, the slowest growth among the regions and a decline from 5.6% year-over-year growth in June. Capacity rose 4.6% and load factor slid 0.6 percentage point to 84.2%. Signs of softening demand have come alongside disruption from the general strikes in Brazil.
African airlines’ July traffic rose 6.8%, second highest among the regions. Although this represented a decline from 11.0% growth recorded in June, the seasonally-adjusted trend remains strong. Capacity rose 3.9%, and load factor jumped 2.1 percentage points to 76.0%. Higher oil and commodity prices are supporting economies in a number of countries.
Domestic travel demand grew by 7.8% year-on-year in July, broadly in line with 8.0% growth recorded in June. All markets saw annual increases, with China, India and Russia posting double-digit growth rates. Domestic capacity climbed 6.9%, and load factor rose 0.8 percentage point to 85.6%.
Russia’s domestic traffic soared 10.8% in July--a 13-month high--as rising world oil prices are helping support economic activity as well as incomes and jobs.
US domestic traffic also surged to a 5-month high of 5.6%, well above the 5-year average of 4.2%, boosted by the rising US economy.
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