Passenger traffic continues strong growth in May

The International Air Transport Association (IATA) has announced global passenger traffic results for May, showing that demand (measured in revenue passenger kilometers, or RPKs) rose 6.1 per cent compared to the same month in 2017.

This is a slight pickup from 6.0 per cent year-over-year growth for April 2018. Capacity climbed 5.9 per cent and load factor rose 0.1 percentage point to 80.1 per cent.IATA’s Director General and Chief Executive Officer (CEO), Alexandre de Juniac, said the month of May was another solid month in terms of demand growth.

“As had been expected, we saw some moderation, as rising airline costs are reducing the stimulus from lower airfares. In particular, jet fuel prices are expected to be up nearly 26 per cent this year compared to 2017. Nevertheless, the record load factor for the month signifies that demand for air connectivity is strong,” he said.International passenger traffic demand rose 5.8 per cent, which was up from 4.6 per cent growth in April.

Asia-Pacific airlines saw their traffic rise 8.0 per cent in May compared to the year-ago period, slightly down on an 8.1 per cent increase in April. Capacity increased 7.6 per cent, and load factor edged up 0.3 percentages point to 77.9 per cent. Passenger traffic has continued to trend strongly upwards in seasonally-adjusted terms, buoyed by a combination of robust regional economic growth and increases in the number of route options for travelers.

European carriers’ May demand climbed 6.2 per cent over May 2017, well above the 3.4 per cent year-over-year growth recorded in April. Capacity rose 5.1 per cent and load factor was up 0.8 percentage point to 83.5 per cent, which was the highest among regions. Despite the impact of strikes in the region and mixed signals regarding the economic backdrop, traffic growth is healthy.

Middle East carriers’ May demand growth slowed to 0.8 per cent compared to a year ago, from 2.9 per cent annual growth recorded in April. The earlier timing of Ramadan this year may have affected the result, but more broadly, the upward trend in traffic has slowed compared to last year. May capacity increased 3.7 per cent, and load factor fell 1.9 percentage points to 67.5 per cent.

African airlines’ traffic rose 3.8 per cent in May compared to the year-ago period, which was an eight-month low. Capacity rose 3.2 per cent and load factor edged up 0.4 percentage point to 66.4 per cent. The region’s two largest economies, Nigeria and South Africa, may be moving in opposite directions again, with higher oil prices bolstering the Nigerian economy, while business confidence in South Africa has weakened again.

“Last month, IATA released its mid-year economic report showing expectations of an industry net profit of $33.8 billion. This is a solid performance. But our buffer against shocks is just $7.76. That’s the average profit per passenger that airlines will make this year—a narrow 4.1 per cent net margin.

“And there are storm clouds on the horizon, including rising cost inputs, growing protectionist sentiment and the risk of trade wars, as well as geopolitical tensions. Aviation is the business of freedom, liberating people to lead better lives. Governments that recognize this will take steps to ensure aviation is economically sustainable. And aviation works best when borders are open to trade and people,” said de Juniac.