Domestic demand rises in China, India and Russia
March capacity climbed 6.4 per cent compared to a year ago, and load factor surged 2.4 percentage points to 80.7 per cent.
African airlines continued to enjoy good demand, with traffic up 6 per cent compared to March 2016. Capacity rose 2.4 per cent, and load factor strengthened 2.3 percentage points to 68.2 per cent. Notwithstanding fragility in the region’s biggest economies (Nigeria and South Africa), traffic growth has strengthened in recent months with RPKs growing at an annualised pace of nearly 10 per cent since mid-2016. This pick-up reflects a combination of faster growth on the key market to and from Europe, and between Africa and the Middle East.
Domestic demand rose 7.6 per cent in March. This was driven primarily by double-digit traffic increases in China, India and Russia, supported by strong single-digit growth in Japan. Domestic capacity climbed 6.1 per cent, and load factor lifted 1.2 per- centage points to 83.2 per cent. Brazil’s domestic market continues to recover and returned to positive year-over-year growth in March for the first time since July 2015.
Japan’s domestic traffic growth hit a three-year high in March, continuing the ongoing recovery since spring 2016.This has come alongside an increase in the number of domestic routes flown (albeit with lower average flight frequencies).
The bottom line
“The first quarter results are strong. However, the last weeks have been challenging to the passenger business.The laptop ban—implemented with next to no notice, no dialogue and no coordination — is testing public confidence in how governments and industry work together to keep flying secure. So, even as rumours persist that the ban will be expanded to other airports and regions, we are calling on govern- ments to work with the industry to find alternatives to keep flying secure without causing great inconvenience to our passengers,” said de Juniac.
“The video was so shocking that it would be easy for lawmakers and regulators to get caught up in this groundswell of outrage and take steps to limit overselling of flights. However, the management of overbooking has actually worked well for decades. It ensures that scarce capacity is efficiently utilised; we see that in today’s record load factors. Overbooking helps airlines avoid empty seats, and that helps to keep costs and fares low. Governments have acknowledged that this ultimately benefits consumers. If industry-level change is discussed, let’s make sure that there is a transparent fact-based dialogue between industry and regulators. We must be careful to not risk undoing the many benefits unleashed by the competitive forces of deregulation,” said de Juniac.