IATA reports soft start to peak travel period

Geneva: The International Air Transport Association (IATA) on Friday announced slowing global passenger demand growth for July.

Total revenue passenger kilometers (RPKs) rose 3.6 percent compared to the same month in 2018. This was down from 5.1 percent annual growth recorded in June. All regions posted traffic increases.

Monthly capacity- available seat kilometers or ASKs- increased by 3.2 percent and load factor rose 0.3 percentage point to 85.7 percent which is a new high for any month.

“July’s performance marked a soft start to the peak passenger demand season,” said IATA’s Director General and CEO Alexandre de Juniac.

“Tariffs, trade wars, and uncertainty over Brexit are contributing to a weaker demand environment than we saw in 2018. At the same time. the trend of moderate capacity increases is helping to achieve record load factors,” he said in a statement.

July international passenger demand rose 2.7 percent compared to July 2018 which was a deceleration compared to the 5.3 percent growth recorded in June. Capacity climbed 2.4 percent and load factor edged upward 0.2 percentage point to 85.3 percent. All regions reported growth led by airlines in Latin America.

Asia Pacific airlines’ July traffic rose 2.7 percent over the year-ago period, a slowdown compared to June growth of 3.9 percent and their weakest performance since early 2013. Capacity increased 2.4 percent and load factor rose 0.2 percentage point to 82.6 percent.

US-China and Japan-South Korea trade tensions, as well as political tensions in Hong Kong — all, have weighed on business confidence.

Domestic travel demand outperformed international growth in July as RPKs rose 5.2 percent in markets tracked by IATA, up from 4.7 percent growth in June. Domestic capacity climbed 4.7 percent and load factor rose 0.4 percentage point to 86.5 percent.

China’s domestic traffic rose 11.7 percent in July — an acceleration over 8.9 percent growth recorded in June and the strongest domestic performance. Growth is benefitting from lower fares and more connections.

Japan’s domestic traffic climbed 4.7 percent in July, up from 2.6 percent in June. Business confidence and economic growth are relatively positive at the moment.

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