December 4, 2014

Passenger traffic maintains strong growth in October

The International Air Transport Association (IATA) announced global passenger traffic results for October showing a strengthening in demand growth compared to September 2014 and to the year-ago period. Total revenue passenger kilometers (RPKs) rose 5.7% over October 2013, slightly ahead of the 5.2% year-on-year rise recorded in September 2014. October capacity (available seat kilometers or ASKs) increased by 5.5%, causing load factor to rise 0.1 points to 79.1%. “Against a backdrop of economic weakness in some regions, October traffic results show demand for connectivity remains strong on a global basis,” said Tony Tyler, IATA’s Director General and CEO. “With 2014 drawing to a close, the outlook for air travel remains largely positive. Improvements in economies in Asia-Pacific and the US are offsetting weakness in the Eurozone and China. The fall in oil prices, if sustained, could provide a much-needed operating cushion. But there are risks which must also be accounted for—including the proliferation of political instability,” said Tyler. October international passenger demand rose 5.5% compared to the same month last year, with airlines in all regions except Africa recording growth. Capacity climbed 6.4% and load factor dipped 0.6 percentage points to 78.0%.
European airlines saw demand increase by 5.8% in October versus October 2013, the strongest growth among the three largest regions. Although there has been some slowdown in the Eurozone economy, travel on low cost carriers has remained robust and is helping sustain current results. Capacity rose 5.0% and load factor climbed 0.6 points to 81.9%, highest among regions. Asia-Pacific carriers’ traffic rose 5.5% compared to the year-ago period, reflecting stronger regional trade activity which encourages business travel. The economic slowdown in China has yet to have any impact on regional trade activity and related business travel. Capacity rose 7.4% and load factor dropped 1.4 points to 74.9%. North American airlines experienced a 1.8% rise in traffic compared to October a year ago. While a slowdown compared to September year-over-year growth, underlying trends in business activity are positive and growth in trade volumes has accelerated. Capacity rose 3.2%, which caused load factor to dip 1.1 points to 80.3%. Middle East carriers’ demand climbed 10.3% in October, the largest increase for any region, reflecting strong regional economies with rising export activity that supports regional trade and related international business travel. Capacity climbed 13.5%, causing load factor to fall 2.1 points to 73.5%. Latin American airlines saw traffic climb 6.5% compared to October 2013, second best among regions. Capacity rose 6.0% and load factor rose 0.5 points to 80.5%. The weak growth in the Brazilian economy may be deteriorating further but regional trade volumes have been improving. African airlines’ traffic contracted 1.6% in October, while ASKs slipped 0.1%, resulting in a 1.0 point drop in load factor to 66.8%, the lowest for any region. The weakness reflects adverse economic developments in some parts of the continent. However, the improving outlook for South Africa could ease some of the downward pressure on the continent’s carriers. Additionally, the effect of any Ebola-related traffic downturn is mostly restricted to Guinea, Liberia and Sierra Leone, markets that comprise a very small proportion of overall African traffic.



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