ASIA Travel Tips.com
Tue, 8 December 2015

Growth in Global Air Passenger Traffic Stimulated by Lower Fares

IATAs global passenger traffic results for October 2015 show continued strong demand growth for both domestic and international traffic compared to the year-ago period.

Total revenue passenger kilometers (RPKs) rose 7.5%, which was in line with the 7.4% year-on-year expansion seen in September.

October capacity (available seat kilometers or ASKs) increased by 5.7%, while load factor rose 1.4 percentage points to 80.5%.

Growth in air travel has been stimulated by lower fares, particularly for leisure travel. Data for the first 8 months of the year show a 5% fall in average fares in currency-adjusted terms. It is estimated that this fall in fares has supported approximately 3 percentage points of the rise in traffic year-to-date.

The air travel story is generally a good one. There are some weak spots. For example the Brazilian air transport sector is caught in perfect storm of a deepening recession, high costs and a weak currency. In most parts of the world we see strong demand for travelexceeding the growth in capacity. Load factors are averaging over 80% and consumers are the big winners with fares trending downwards, said Tony Tyler, IATAs Director General and CEO.

International Passenger Markets

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 a year ago. 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 a year ago. 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%.

Domestic Passenger Markets

Demand for domestic travel climbed 7.3% in October compared to October 2014. There was a wide disparity in results however, 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-on-year. Part of the expansion in domestic air travel is related to an acceleration in capacity additions.

 Brazils 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.

Looking Forward

 The end of the year is a festive time around the world. But this years celebrations will be juxtaposed against the somber reality of recent terrorist activity in the Middle East and Europe. This, by all indications, also includes the downing of Metrojet 9268 with the loss of all aboard.

Acts of terror, whether they occur on a city street or at 30,000 feet, will not get the better of us, or succeed in limiting the possibilities of our world. The most important response to acts and threats of terrorism is to show that we will not let the terrorists change our lives.

That extends to aviation and tourism. Over 100,000 flights will bring a million people together today because of the efforts of 8.7 million peopleaviation professionals. These efforts will create opportunities for business and leisure and for greater understanding among people and cultures. By doing so, flying is a force for good in our world. As we look to 2016 and beyond its a reality that should continue to inspire us all, said Tyler.

See also: Aviation Industry Update by Association of Asia Pacific Airlines (AAPA) and Future of Air Travel - HD Video Interview with SITA President for Asia Pacific.

See other recent news regarding: Interviews, Pictures, Videos, IATA, Traffic

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