IATA passenger traffic maintains strong growth trend in October: +7.4% year-over-year

The International Air Transport Association (IATA) announced global passenger traffic results for October showing 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-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%. 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 the 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 travel—exceeding the growth in capacity. Load factors are averaging over 80% and consumers are the big winners with fares trending downwards,” said Tony Tyler, IATA’s 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 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%.

Domestic Passenger Markets

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.