Global passenger demand grows as IATA chief urges Brexit resolution

The aviation industry experienced continued strong traffic growth in August “putting the cap on a very good peak travel season”, according to the latest figures published by the International Air Transport Association (IATA). But the organisation’s director general and chief executive urged UK and EU aviation negotiators to agree a Brexit deal to ‘preserve the business of freedom’ in Europe.

Global passenger traffic demand measured in total revenue passenger kilometres climbed 6.4 percent in August 2018, compared with the same month a year ago. This was slightly above the 6.1 percent annual increase for July.

August air service kilometres (ASKs) increased by 5.5 percent, and load factor climbed 0.7 percentage point to 85.3 percent, which was the highest for any month since at least 1990.

“The all-time record load factor reflects that airlines are maximising the efficiency of their assets at a time of rising fuel prices and other costs that are limiting the opportunities for low fare stimulation," said Alexandre de Juniac, IATA’s director general and chief executive.     

However, de Juniac urged UK and EU aviation negotiators to achieve a post-Brexit agreement, saying it was “absolutely critical” that a deal is reached.

“It is not just about permission for flights to take off and land. Everything from pilots’ licenses to security arrangements, and much more besides, needs to be agreed upon,” he said.

“Mutual recognition of existing standards can address much of this, but we cannot wait until the eleventh hour.

“An assumption that ‘it will be all right on the night’ reveals little understanding of the complexities involved. Preparations should be made for every contingency, in an environment of far greater transparency than we have seen to date.”

International passenger demand

August international passenger demand rose 5.6 percent compared to August 2017, in line with 5.5 percent year-over-year growth achieved in July. All regions recorded increases, led by airlines in the Asia-Pacific region. Capacity climbed 5.1 percent, and load factor edged up 0.4 percentage point to 85.0 percent.

Asia-Pacific airlines’ August traffic increased 7.5 percent compared to the year-ago period, which was an acceleration compared to a 7.2 percent rise in July. Capacity rose 6.1 percent and load factor rose 1.1 percentage points to 82.6

European carriers saw August demand climb 5.1 percent year-to-year, which was also an increase from the 4.5 percent growth recorded in July. However, in seasonally-adjusted terms, growth has tracked sideways since late spring. Capacity rose 4.5 percent, and load factor climbed 0.5 percentage point to 88.9 percent, which was the highest among regions. European demand is being affected by “mixed signs on the economy” as well as possible disruptions from air traffic control strikes.

Middle Eastern carriers posted a 5.4 percent traffic increase in August, which was a slowdown from 6.2 percent in July. Passenger volumes have trended upwards at an 8 percent annualised rate since the start of the year. Capacity increased 6.3 percent, with load factor slipping 0.7 percentage point to 80.7 percent.

North American airlines’ international demand rose 3.7 percent compared to August a year ago. While this was a slowdown from 4.1 percent growth recorded in July, this largely reflected developments a year ago rather than any change in the current healthy trend. Capacity rose 3.3 percent, and load factor grew by 0.4 percentage point to 87.2 percent.

Latin American airlines experienced a 4.8 percent demand increase in August compared to the same month last year, up from 3.5 percent annual growth in July. Capacity increased by 6.5 percent but load factor slid 1.3 percentage points to 81.4 percent.

African airlines’ traffic climbed 6.8 percent in August. While this was a slowdown from the 7.4 percent growth recorded in July, IATA said the bigger picture is that demand remains strong.

Domestic passenger demand       

Demand for domestic travel climbed 7.7 percent in August compared to August 2017, up from the 7.2 percent growth recorded in July. Capacity rose 6.2 percent and load factor increased 1.2 percentage points to 85.7 percent.

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