Global air traffic demand rises +5% in June, says International Air Transport Association

INTERNATIONAL. Global passenger traffic demand grew +5% year-on-year in June, as measured in total revenue passenger kilometres (RPKs).

This was up slightly from the +4.7% growth recorded in May, according to the International Air Transport Association (IATA).

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International passenger demand rose +5.4%, which was an improvement from +4.6% annual growth recorded in May. All regions recorded increases in growth, led by airlines in Africa.

June capacity rose +3.4%, and load factor climbed 1.6 percentage points to 83.8%.

IATA Director General and CEO Alexandre de Juniac: “Ongoing trade disputes are contributing to declining global trade and slowing traffic growth.”

“June continued the trend of solid passenger demand growth while the record load factor shows that airlines are maximising efficiency,” said IATA Director General and CEO Alexandre de Juniac.

“Amid continuing trade tensions between the US and China, and rising economic uncertainty in other regions, growth was not as strong as a year ago, however.”

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European airlines saw traffic rise +5.6% in June, in line with +5.5% demand growth the month before, IATA said. Capacity climbed +4.5% and load factor rose 1.0% percentage point to 87.9%, tied with North America as the highest among the regions. The solid growth occurred against a backdrop of slowing economic activity and declining business confidence in the Euro area and the UK, IATA noted.

Middle Eastern carriers posted a +8.1% demand increase, which was well up on the +0.6% annual increase recorded in May. The timing of Ramadan which fell almost exclusively in May this year likely contributed to the strongly contrasting outcomes, IATA said. Capacity rose +1.7% and load factor jumped 4.5 percentage points to 76.6%.

Asia Pacific airlines recorded a +4.0% increase, down from the +4.9% growth in May. US-China trade tensions have impacted demand in the broader Asia-Pacific-North America market and also within the inter-Asia market, according to IATA. Capacity rose +3.1% and load factor edged up 0.7 percentage point to 81.4%.

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North American carriers’ demand rose +3.5%, down from +5.0% in May, similarly reflecting US-China trade tensions. Capacity climbed +2.0%, with load factor increasing 1.3 percentage points to 87.9%.

In Latin America, airlines recorded a +5.8% rise in traffic, up slightly from +5.6% annual growth recorded in May. Capacity increased by +2.5% and load factor surged 2.6 percentage points to 84.0%. “Weakening economic conditions in a number of key countries in the region could mean a softening in demand going forward,” IATA commented.

African airlines’ traffic soared +11.7%, up from +5.1% in May. Capacity rose +7.7%, and load factor jumped 2.6 percentage points to 70.5%. IATA said demand was benefitting from a generally supportive economic backdrop, including improved economic stability in several countries, as well as increased air connectivity.

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Demand for domestic travel increased +4.4% year-on-year, which was a slight slowdown from +4.7% growth in May. Led by Russia, all of the key domestic markets tracked by IATA reported traffic increases except for Brazil and Australia. June capacity rose 3.1%, and load factor climbed by 1.1 percentage points to 85.5%.

Brazil’s domestic traffic fell 5.7%, a worsening from the 2.7% decline recorded in May, while India’s domestic market continues to recover from the demise of Jet Airways. Demand grew +7.9% there.

“The peak summer travel season in the Northern Hemisphere is upon us,” concluded de Juniac. “Crowded airports are a reminder of the vital role aviation plays in connecting people and commerce. For those travelling on journeys of discovery or reuniting with loved ones, aviation is the business of freedom.

“But aviation relies on borders that are open to trade and people to deliver its benefits. Ongoing trade disputes are contributing to declining global trade and slowing traffic growth. These developments are not helpful to the global economic outlook. Nobody wins a trade war.”

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