Lower fares boost airline traffic in October
Stimulated by lower fares, particularly for leisure travel, global passenger traffic for both domestic and international markets grew strongly this October, compared with the year-ago period.
“The air travel story is generally a good one although there are some weak spots,” says International Air Transport Association (IATA) Director General and CEO Tony Tyler.
“In most parts of the world we see a strong demand for travel, exceeding the growth in capacity. Load factors are averaging over 80% and consumers are the big winners with fares trending downwards.”
Total revenue passenger kilometers (RPKs) rose 7.5%, in line with the 7.4% year-over-year expansion seen in September. October capacity (available seat kilometers or ASKs) increased by 5.7%, and load factor rose 1.4 percentage points to 80.5%.
Data for the first 8 months of the year show a 5% fall in average fares in currency-adjusted terms. It is estimated that the fall in fares has supported approximately three percentage points of the rise in traffic year-to-date.
October international passenger demand rose 7.6% compared to October 2014, with airlines in all regions recording growth. Total capacity climbed 6.1%, pushing up load factor 1.1 percentage points to 79.2%.
Asia-Pacific airlines’ October traffic increased 8.6% compared to the year-ago period.
Significant declines in trade activity to/from Emerging Asia and slower than expected growth in the Chinese economy do not appear to be impacting on passenger demand. Capacity rose 6.6% and load factor gained 1.5 percentage points to 76.7%.
European carriers saw demand rise 6.7%, supported by economic recovery in the Eurozone. Capacity climbed 4.2% and load factor jumped 1.9 percentage points to 83.8%, highest among the regions.
North American airlines’ traffic rose 4.6% compared to October a year ago, continuing the healthy trend of recent months.
Capacity climbed just 2.2%, propelling a 1.9 percentage point rise in load factor to 82.1%. Expectations for better economic performance are supporting travel demand.
Middle East carriers posted a 10.3% traffic increase in October. Capacity rose 12.7%, however, which caused load factor to slide 1.5 percentage points to 72.5%. The Middle East was the only region to see a decline in load factor for the month.
Latin American airlines experienced a 10% rise in October demand compared to the same month last year. Capacity increased by nearly the same amount and load factor edged up 0.1 percentage points to 80.5%.
Solid trade activity has provided a boost to business-related international travel, notwithstanding economic weakness in Brazil and Argentina.
African airlines’ traffic climbed 6.7% in October, marking a fourth consecutive month of improvement compared to the year-ago period.
However, fundamental economic drivers remain weak, so the result could also reflect volatility in reported volumes. Capacity rose 5.2%, with the result that load factor improved 1.0 percentage point to 67.4%.
On the other hand, demand for domestic travel climbed 7.3% in October compared to October 2014.
There was a wide disparity in results, with Brazil and Australia both showing declines while China, India and Russia posted double-digit increases. Domestic capacity climbed 5.0%, and load factor improved 1.8 percentage points to 82.7%.
US airlines reported a second month of strong demand with RPKs up 6.9% year-over-year. Part of the expansion in domestic air travel is related to an acceleration in capacity additions.
Brazil’s domestic traffic fell 6% compared to the year-ago period as airlines struggle under the burdens of a deepening recession, sinking local currency and government policies that impose crushing costs on the industry.