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Thu, 9 May 2019

IATA Reports 3.1% Increase in RPKs; ASKs Up 4.2% in March 2019

IATA's global passenger traffic results for March 2019 shows that demand (measured in revenue passenger kilometers, or RPKs) rose 3.1% when compared to the same month a year ago, the slowest pace for any month in nine years.

This largely was owing to the timing of the Easter holiday, which fell nearly a month later than in 2018. On a seasonally-adjusted basis, the underlying growth rate has been relatively steady since October 2018 at a 4.1% annualized pace. Capacity (available seat kilometers, or ASKs) for the month of March grew 4.2% and load factor dropped 0.9 percentage point to 81.7%.

While traffic growth slowed considerably in March, we do not see the month as a bellwether for the rest of 2019. Nevertheless, the economic backdrop has become somewhat less favorable, with the IMF having recently revised its GDP outlook downward for a fourth time in the past year, said Alexandre de Juniac, IATAs Director General and CEO.

Thai Smile Airbus A320 reg: HSTXC. Picture by Steven Howard of TravelNewsAsia.com Click to enlarge.

March international passenger demand rose just 2.5% compared to March 2018, which was down from 4.5% year-on-year growth recorded in February and almost 5 percentage points below its five-year average pace. All regions showed growth with the exception of the Middle East. Total capacity climbed 4.0%, and load factor fell 1.2 percentage points to 80.8%.

European carriers saw March demand increase 4.7% over March 2018, down from 7.5% annual growth in February. The result partly reflects falling business confidence in the Eurozone and ongoing uncertainty about Brexit. March capacity rose 5.4% and load factor slid 0.6 percentage point to 84.2%, which still was the highest among regions.

Asia-Pacific airlines traffic climbed 2.0% in March, compared to the year-ago period, which was down from 4% growth in February. However, results were stronger on a seasonally-adjusted basis. Capacity increased 4.0%, and load factor dropped 1.6 percentage points to 80.1%.

Middle East carriers passenger demand fell 3.0% in March, marking a second consecutive month of declining traffic. This reflects the broader structural changes in the industry which have been taking place in the region. Capacity increased 2.3%, and load factor plunged 4.0 percentage points to 73.8%.

North American airlines posted a 3.0% traffic rise in March compared to the year-ago period, which was down somewhat from 4.2% year-on-year growth in February. On a seasonally-adjusted basis, traffic has been trending strongly upwards, however. Capacity climbed 2.6% and load factor edged up 0.3 percentage point to 83.7%.

Latin American airlines had the fastest traffic growth at 5.5%, compared to a year ago, up from 4.6% in February. March capacity rose 5.8%, and load factor dipped 0.2 percentage point to 81.9%. Latin America was the only region to show an increase in the year-on-year growth rate for March compared to February. In seasonally-adjusted terms traffic continues to trend upward sharply, notwithstanding economic and political uncertainty in some key countries.

African airlines demand increased 2.1% compared to March 2018, down from a 2.5% rise in February. Capacity climbed 1.1%, and load factor strengthened 0.7 percentage point to 71.4%. The upward traffic trend has softened since mid-2018 in line with falling business confidence in some of the regions key economies.

Domestic Passenger Markets

Domestic demand rose 4.1% in March, which was a deceleration from 6.2% growth recorded in February that was driven largely by developments in China and India. Domestic capacity climbed 4.5%, and load factor dipped 0.3 percentage point to 83.4%.

Indias domestic traffic rose just 3.1% in March, down from Februarys growth of 8.3% and well-off the torrid five-year average growth pace of close to 20% per month. The slowdown largely reflects the reduction in flight operations of Jet Airwayswhich stopped flying in Aprilas well as disruptions at Mumbai airport owing to construction.

Australias domestic traffic fell 3.2% in March, marking the fifth consecutive month of contracting demand.

Looking Ahead

Despite Marchs slowdown, the outlook for air travel remains solid. Global connectivity has never been better. Consumers can choose from more than 21,000 city pair combinations on more than 125,000 daily flights. And air fares continue to decline in real terms. Aviation is truly the Business Freedom for the more than 12.5 million passengers who will board flights each day. But it also remains extremely challenging, as the recent failures of Jet Airways and WOW Air illustrate. Airlines compete intensely with one another, but they also cooperate in areas such as safety, security, infrastructure and the environment, to ensure that aviation can accommodate a forecast doubling in demand by 2037. Next month, leaders of the industry will gather in Seoul for the 75th IATA Annual General Meeting and World Air Transport Summit where all of these items will be high on the agenda, de Juniac said.

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