Global passenger demand up 8% in November

Published January 15, 2018, 12:00 AM

by manilabulletin_admin

By Emmie V. Abadilla

Global passenger demand, measured in revenue passenger kilometers (RPKs), rose 8.0% November, 2017 versus the same period in the preceding year and was the fastest growth rate in five months, according to the International Air Transport Association (IATA).

“The airline industry is in a good place entering 2018. November’s strong demand gives the industry momentum,” stressed IATA’s Director General and CEO Alexandre de Juniac. “We begin the New Year with confidence and expect 2018 to be the fourth year in a row where the industry’s return on invested capital will exceed the cost of capital.”

Overall, “the number of unique city-pair connections now tops 20,000. Passengers more travel choices than ever and the cost of travel in real terms has never been cheaper. Along with delivering great value to consumers, airlines are rewarding their shareholders with normal levels of profitability.”

However, “challenges remain,” he cautioned. “Security threats continue. Infrastructure issues persist. Fees and charges are growing part of the cost base. And in many cases, airports and air traffic management struggle to keep pace with demand and technology advancements.”

“These can only be addressed in partnership with governments. And doing so requires governments to recognize the enormous value that aviation — the business of freedom — provides to their economies and the world,” the CEO elaborated.

So far, all regions showed growth in the latest IATA figures and carriers in the Asia-Pacific region led for the third consecutive month.

Total global passenger capacity climbed 6.6%, and load factor increased 1.1 percentage points to 78.2%. Capacity (available seat kilometers or ASKs) rose 6.3%, and load factor, 1.2 percentage points to 80.2%.

Asia-Pacific airlines’ November traffic climbed 10.8% compared to the year-ago period, driven by strong regional economic growth and continuing expansion of options for travelers. Capacity increased 8.7% and load factor rose 1.5 percentage points to 78.6%. Middle East carriers posted 4.9% demand increase, the lowest among the regions.

The market segment to and from North America continues to be affected by the now-lifted ban on personal electronic devices, as well as a wider impact stemming from the proposed travel restrictions to the US from certain countries. Capacity rose 4.3% and load factor lifted 0.4 percentage point to 70.1%.

North American airlines’ traffic climbed 6.4%, capacity rose 6.1% and load factor edged up 0.2 percentage point to 79.1%. The relatively vigorous economic backdrop supported outbound passenger demand, but this was partly offset by a negative impact on inbound travel to the US from the additional security measures involved with traveling there.

Latin American airlines’ November traffic climbed 7.2% compared to November 2016. This was in line with the region’s five-year average growth rate, although on a seasonally-adjusted basis, volumes are still below the peak level reached in July, 2017. Capacity also increased by 7.2%, keeping load factor flat at 81.9%.

European carriers saw demand increase by 7.9% in November, 2017. Economic conditions in the region remain very favorable, with business confidence recently having risen to its strongest level in seven years. Capacity climbed 6.2% and load factor rose 1.3 percentage points to 81.9%, which was tied with Latin America as the highest load factor among the regions.

African airlines experienced a 7.9% rise in demand compared to November, 2016. Volumes have started to trend upwards strongly again in seasonally-adjusted terms in recent months, in line with an improvement in business confidence in key economies including Kenya and Nigeria.

Indicators in South Africa, by contrast, are still consistent with falling economic activity. Capacity rose 3.7% and load factor climbed 2.7 percentage points to 68.3%.

In the domestic passenger market, demand rose 7.8%, up from a 7.2% year-over-year increase in October. All markets showed growth, led again by India and China. Domestic capacity climbed 5.9%, and load factor improved 1.4 percentage points to 83.6%.

India’s domestic traffic rose 16.4% in November, marking the 39th consecutive month of double-digit domestic growth.

Australia’s domestic traffic rose 3.3% in November, compared to November 2016, which was a 14-month high. This has occurred against a backdrop of tightening capacity, which dropped 0.5% in November.