IATA predicts slower air traffic growth on rising cost
THE INTERNATIONAL AIR TRANSPORT ASSOCIATION (IATA) has predicted slower air traffic growth in the near term, despite reporting strong airline revenue growth for July, warning rising costs will see the momentum slow over the coming months.
According to IATA data, total revenue passenger kilometres (RPKs) for IATA’s member airlines rose 6.2 percent for July compared to the same month in 2017. However, this was down from the 8.1 percent growth seen in June.
Capacity increased by 5.5 percent, while load factors rose 0.6 percentage points to a record July high of 85.2 percent.
However, IATA found that global passenger demand was only up 5.3 percent year-on-year compared to 8.2 percent in June.
Despite slowing demand, all regions reported overall growth, led by Asia Pacific for the first time in three years. The market saw traffic rise 7.5 percent, while capacity was up 6 percent and load factors grew to 82.1 percent.
Europe experienced traffic growth of 4.4 percent – down from 7.1 percent in June – but IATA says passenger volumes have been tracking sideways, reflecting mixed developments on the economic front and the possible effects of air traffic control strikes seen across the region.
Europe also had the highest load factor of all regions at 89.1 percent.
While IATA agrees the figures marked a solid start to the peak travel season, Alexandre de Juniac, director general and CEO seemed hesitant to celebrate.
De Juniac said: “The industry posted another month of solid traffic growth. And the record load factor shows that airlines are becoming even more efficient in terms of deploying capacity to meet demand. However, rising costs – particularly fuel – will likely limit the stimulus we would expect from lower airfares. Therefore, we do expect to see a continued slowing of growth compared to 2017.”
Commenting on the issue faced by European carriers resulting from air traffic control shortages and strikes, de Juniac continued: “The second half of the year got off to a solid start.