Moderating Demand Trend Continues: IATA

The International Air Transport Association (IATA) has reported global passenger traffic results for May showing that demand (measured in revenue passenger kilometres, or RPKs) rose 4.6%, compared to the same month in 2015, which was the same level achieved in April.

Capacity climbed 5.5%, which pushed the average load factor down 0.7 percentage points to 78.7%. Demand for domestic traffic rose 5.1%, outpacing international demand growth of 4.3%.

“After a very strong start to the year, demand growth is slipping back toward more historic levels. A combination of factors are likely behind this more moderated pace of demand growth. These include continuing terrorist activity and the fragile state of the global economy. Neither bode well for travel demand. And the shocks of Istanbul and the economic fallout of the Brexit vote make it difficult to see an early uptick,” said IATA director general Tony Tyler.

Annual growth in international RPKs slowed for the third consecutive month, to 4.3%, from 5% recorded in April year-over-year. Airlines in all regions recorded growth. Total capacity climbed 6.1%, causing load factor to slip 1.3 percentage points to 77.1%.

North American airlines’ traffic climbed 0.5% as carriers continue to focus on the larger and stronger domestic markets. Capacity rose 1.9% and load factor fell 1.1 percentage points to 80.1%.

“The shockwaves of the Brexit vote have extended worldwide and the fallout will affect the air transport industry, from both economic and regulatory perspectives. Aviation plays a vital role in supporting economic growth and development. As the post-Brexit regulatory framework is negotiated between the EU and the UK it is critical that there are no steps backward for aviation connectivity,” added Tyler.