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October passenger demand moderates, says IATA

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GENEVA – The International Air Transport Association (IATA) announced global passenger traffic results for October showing that demand (measured in revenue passenger kilometers, or RPKs) rose 5.8% compared to the same month last year. Capacity grew 6.3% and load factor slid 0.4 percentage points to 80.1%.

October’s performance was a slow-down on the 7.1% year-on-year growth rate recorded in September but still was broadly in line with 10-year averages. Domestic and international travel growth largely was in balance.

“Passenger demand growth in October was consistent with long-term trends but represented a deterioration compared to September. While the negative traffic impact from terror attacks and political instability in parts of the world has receded, the long downward trend in yield – which helped to stimulate travel – has leveled off. Furthermore, the recent OPEC agreement to restrict oil production suggests fuel prices have ended their slide,” said Alexandre de Juniac, IATA’s Director General and CEO.

October 2016 
(% year-on-year)

World share¹
 

RPK
 

ASK
 

PLF 
(%-pt)²         

PLF 
(level)³  

Total Market

100.0%

5.8%

6.3%

-0.4%             

80.1%

Africa

2.2%

5.3%

3.9%

1.0%

70.1%

Asia Pacific

31.5%

9.2%

8.5%

0.6%

79.3%

Europe

26.7%

5.3%

5.7%

-0.4%

82.5%

Latin America

5.4%

3.9%

0.9%

2.4%

82.3%

Middle East

9.4%

6.5%

10.0%

-2.3%

70.0%

North America

24.7%

2.1%

3.7%

-1.4%

83.7%

   ¹% of industry RPKs in 2015   ²Year-on-year change in load factor   ³Load factor level   

 

 

International Passenger Markets 
October international passenger demand rose 5.9% compared to October 2015. Airlines in all regions recorded growth. Total capacity rose faster, up 6.6%, causing load factor to slide 0.6% percentage points to 78.6%.

Asia-Pacific airlines’ traffic rose 7% in October compared to the year-ago period. Capacity rose 7.1% and load factor dipped 0.1 percentage point to 76.9%. The strong upward trend in seasonally-adjusted traffic has slowed in recent months, although it is too soon to determine whether this is an actual weakening or just a brief pause. On the other hand the Asia-to-Europe market, which is highly sensitive to shock events, is continuing to recover. 

European carriers saw October demand climb 5.7% over October 2015. Capacity increased 6.2% and load factor slipped 0.4 percentage points to 83.2%. International demand for European carriers appears to be returning to normal after the disruption caused by terrorism and political instability earlier this year.

Middle East carriers experienced a 7% rise in demand in October, the slowest pace for the region in 18 months, although perhaps the timing of regional celebrations could have affected the results. Capacity increased 10%, however, with the result that load factor dropped 2.0 percentage points to 70.1%, its lowest level for the month of October since 2006. 

North American airlines’ traffic climbed 2.4% in October compared to the year-ago period. While this was the lowest among the regions, on a seasonally-adjusted basis, passenger volumes have still risen at an annualized rate of around 5% since March. Capacity rose 4.9% and load factor dropped 1.9 percentage points to 80.1%.

Latin American airlines had a 7.1% increase in traffic in October, supported by robust demand for international traffic within the region. Capacity climbed at a much slower rate of 2.1%, causing load factor to surge 4 percentage points to 84.3%, highest among the regions. 

African airlines’ traffic growth slowed to 5.8% year-on-year in October, from 9.1% in September. Economic conditions in parts of the continent remain challenging. Capacity rose 4.3%, and load factor strengthened to 68.8%, up 1 percentage point.
Domestic Passenger Markets 

Domestic demand climbed 5.6% in October compared to October 2015, which was matched by a similar increase in capacity. There was continued wide variation in individual country results, with India and China enjoying double-digit growth rates while other markets experienced much slower growth and Brazil remained in decline.

October 2016 
(% year-on-year)

World share¹
 

RPK
 

ASK
 

PLF      
(%-pt)²     

PLF 
(level)³  

Domestic

36.4%     

5.6%

5.6%    

0.0%      

82.8%

Australia

1.1%

2.2%

0.1%

1.7%

80.4%

Brazil 

1.4%

-5.5%

-5.3%

-0.2%

79.1%

China P.R             

8.4%

14.1%

12.4%       

1.2%

84.2%             

Indian             

1.2%

22.7%

21.2%

1.0%

81.7%

Japan             

1.2%

0.8%

-0.8%

1.2%

72.8%

Russia Fed.             

1.3%

2.5%

3.1%

-0.4%

75.5%

US

15.4%

1.7%

3.1%

-1.1%

85.8%   

1% of industry RPKs in 2015   ²Year-on-year change in load factor   ³Load factor level
*Note: the seven domestic passenger markets for which broken-down data are available account for 30% of global total RPKs and approximately 82% of total domestic RPKs

 

India’s domestic market soared 22.7% year-on-year in October, supported by significant growth in real consumer spending and increases in the number of airport pairs served. 

China’s traffic jump of 14.1% in October was attributable to similar factors – although flight frequencies actually have fallen year-to-year.

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