Passenger demand continues on moderate upward path: IATA

Geneva: The International Air Transport Association (IATA) has released global passenger traffic results for September showing that demand measured in revenue passenger kilometres (RPKs) climbed 3.8 percent compared to the same month last year, broadly unchanged from August’s performance.

Capacity measured in available seat kilometres (ASKs) increased by 3.3 per cent and load factor climbed 0.4 percentage point to 81.9 per cent which was a record for any September.

“September marked the eighth consecutive month of below average demand growth,” said IATA’s Director General and CEO Alexandre de Juniac.

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“Given the environment of declining world trade activity and tariff wars, rising political and geopolitical tensions and a slowing global economy, it is difficult to see the trend reversing in the near term,” he said in a statement.

September international passenger demand rose 3 per cent compared to September 2018 which was a decline from 3.6 per cent year-over-year growth achieved in August. All regions recorded traffic increases led by airlines in North America. Capacity climbed 2.6 per cent and load factor edged up 0.3 percentage point to 81.6 per cent.

Asia-Pacific airlines saw September traffic increase 3.6 per cent compared to the year-ago period, an increase over the 3.3 per cent annual growth recorded in August. Despite the uptick, growth remains well below that seen in 2018.

This is occurring amid a weaker economic backdrop in some of the region’s key states as well as trade tensions between the United States and China and, more recently, between Japan and South Korea. Political unrest in Hong Kong has also contributed to subdued regional demand and led to sharp capacity cuts to and from the hub.

Capacity rose 5 per cent and load factor slid 1.1 percentage points to 78.2 per cent.

Globally, demand for domestic travel climbed 5.3 per cent in September compared to September 2018 which was an improvement over the 4.7 per cent annual growth recorded in August. Capacity rose 4.7 per cent and load factor increased 0.5 percentage point to 82.3 per cent.

“These are challenging days for the global air transport industry. Pressure is coming from many directions,” said de Juniac. “In a matter of weeks, four airlines in Europe went bust. Trade tensions are high and world trade is declining.”

The IMF recently revised down its GDP growth forecasts for 2019 to 3 per cent. If correct, this will be the weakest outcome since 2009 when the world was still struggling with the global financial crisis.

“At times like these, governments should recognise the power of aviation connectivity to ignite the economy and drive job creation. Instead, too many governments — in Europe in particular — are fixated on aviation as the goose that lays the golden eggs of taxes and fees. It’s the wrong approach,” said de Juniac.

“Aviation is the business of freedom. Governments should harness its power to drive GDP growth, not tie it down through heavy and punitive tax and regulatory regimes,” he added.

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