IATA: Passenger Demand Losing Momentum

Published on : Thursday, August 4, 2016

IATAThe International Air Transport Association (IATA) announced global passenger traffic data for June showing that demand (measured in revenue passenger kilometers or RPKs) rose by 5.2% compared to the year-ago period. This was up slightly from the 4.8% increase recorded in May (revised). However, the upward trend in seasonally-adjusted traffic has moderated since January. June capacity (available seat kilometers or ASKs) increased by 5.6%, and load factor slipped 0.3 percentage points to 80.7%.

“The demand for travel continues to increase, but at a slower pace. The fragile and uncertain economic backdrop, political shocks and a wave of terrorist attacks are all contributing to a softer demand environment,” said Tony Tyler, IATA’s Director General and CEO.

JUNE 2016 (% YEAR-ON-YEAR) WORLD SHARE1 RPK ASK PLF (%-PT)​2 PLF (LEVEL)​3
Total Market 100.0% 5.2% 5.6% -0.3​% 80.7%
Africa 2.2% 3.2% 5.9% ​-1.7% 65.0%
Asia Pacific 31.5% 9.0% 7.2% ​1.3% ​79.1%
Europe 26.7​% 2.0% 2.7% ​-0.6% ​82.9%
Latin America 5.4% ​4.6% 1.9% ​2.1% ​80.8%
Middle East ​​9.4% 7.3% 14.4% ​-4.6% ​70.3%
North America 24.7% 4.3% 4.3​% ​0.0% 86.3​%
(1)% of industry RPKs in 2015  (2)Year-on-year change in load factor  (3)Load factor level

International Passenger Markets

June international passenger demand rose 5.0% compared to June 2015. All regions recorded growth, led by airlines in Latin America. Capacity climbed 6.4%, causing load factor to slide 1.1 percentage points to 79.4%.

Domestic Passenger Markets

Demand for domestic travel climbed 5.7% in June compared to June 2015, while capacity increased 4.3%, causing load factor to rise 1.1 percentage points to 83.2%. All markets reported demand increases with the exception of Brazil.

JUNE 2016 (% YEAR-ON-YEAR) WORLD SHARE1 RPK ​​ASK PLF (%-PT)​2 PLF (LEVEL)​3
Domestic 36.4% 5.7% 4.3% 1.1% 83.2%
Australia 1.1% 2.8% -3.6% ​4.9% 79.4%
Brazil 1.4% -6.5% -6.4% ​-0.1% 77.7​%
China P.R. 8.4​% 11.3% 8.9% 1.8​% 82.2%
India 1.2% 23.3% 23.8% -0.3​% 82.6%
Japan ​​1.2% 0.9% -2.7% ​2.4% 65.7​%
Russian Federation 1.3% 0.7% -4.0% 3.7% ​80.2%
​US ​15.4% 4.5%​ 4.3%​ ​0.2% 87.7​%
(1)% of industry RPKs in 2015  (2)Year-on-year change in load factor  (3)Load factor level

The Bottom Line: “The latest figures show that aviation and aviation related tourism delivers $2.7 trillion in economic impact and supports some 62.7 million jobs worldwide. It is a powerful force for good in our world. It is too soon to know whether recent terrorist attacks will have a long-term negative influence on demand, nor what will be the impact of Brexit and the events in Turkey. But it is vital that governments recognize and support aviation’s ability to contribute to global economic well-being and better understanding across cultural and political borders,” said Tyler.

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