Passenger demand traffic rises by 11.7% in Africa, others

The International Air Transport Association (IATA) has announced global passenger traffic results for May showing that demand rose by 7.7 per cent compared to the same month in 2016.

This was slower than the 10.9 per cent growth recorded in April. However, this still was well ahead of the five and 10-year average growth rates. Capacity climbed 6.1 per cent, and load factor rose 1.2 percentage points to 80.1 per cent, which was a record high for the month.

All regions, excluding the Middle East and North America, posted record-high May load factors. According to IATA, African airlines’ traffic rose 11.7 per cent in May compared to the year-ago period, which was more than twice as fast as the 5.1 per cent rise in capacity.

As a result, load factor jumped 4.0 percentage points to 67.5 per cent. Demand is supported by recovery on the key Europe market. Conditions in the region’s two largest economies are diverging, with business confidence in Nigeria rising sharply over the past six months, while South Africa’s economy fell into recession in the first quarter.

IATA, the clearing house for 260 airlines worldwide, noted that after adjusting for inflation, global airfares at the start of the second quarter were around six per cent lower than a year ago.

IATA estimated that this contributed to around two-fifths of the annual growth in passenger traffic seen in May. However, the degree of fare stimulus is around half that seen in the second half of 2016. This stimulus is likely to fade further in light of rising airline cost pressures, while business confidence has softened. However, passenger demand is likely to remain well supported during the upcoming peak travel months of July and August.

IATA’s Director General and Chief Executive Officer (CEO), Alexandre de Juniac, said passenger demand is solid and he did not foresee any weakening over the busy summer months in the Northern Hemisphere.

“But the rising price of fuel and other input costs is likely to see airlines’ ability to stimulate markets with lower fares taper over the coming months. In parallel, rising trade protectionism and barriers to travel are worrying trends that, if unchecked, could impact demand. As a business airlines depend on borders that are open to trade and people,” de Juniac said.