IATA: Air Travel Demand Took Off Again In NOV

Open Jaw

IATA has reported that November marked the strongest air travel demand growth in 9 months.

Total revenue passenger kilometers (RPKs) rose 7.6% compared to November 2015. Capacity (available seat kilometers or ASKs) increased by 6.5%, and load factor rose 0.8 percentage points to 78.9%.

"Stronger demand for air travel reflects - and is supporting - a pick-up in the global economic cycle. As the stimulus effect of lower oil prices recedes in the rear view mirror, the strength of the economic cycle will play a key role in the pace of demand growth in 2017," said Alexandre de Juniac, IATA’s Director General & CEO.    

 November international passenger demand rose 8.0% compared to the year earlier, with airlines in all regions showing growth. Total capacity climbed 6.8%, and load factor edged up 0.9 percentage points to 77.1%.

Middle East carriers led all regions with a 12.2% demand increase. But the upward trend in the region’s seasonally adjusted traffic has paused, with November’s level coming in unchanged from July.

European carriers saw demand increase by 8.3% in November 2016, while traffic grew at an annualized pace of 12% over the past 5 months or so. IATA says this suggests that the disruption caused by terrorism and political instability has lifted, against a backdrop of a growing Eurozone economy.

Asia-Pacific airlines’November traffic also climbed 8.3% compared to the year-ago period. Capacity increased 7.1% and load factor rose 0.8 percentage points to 77.4%. The strong upward trend in demand has slowed recently but it is not clear whether this is a longer-term development or just a brief pause.

North American airlines’traffic climbed 1.5% in November. Traffic across the Pacific is growing rapidly but North Atlantic demand is moderating. Capacity rose 1.2% and load factor edged up 0.2 percentage points to 78.7%.

In Latin America,November traffic climb 7.3% year-over-year. Capacity increased by just 2.9%, pushing load factor up 3.4 percentage points to 82.2%. The upward trend in international traffic has remained strong despite difficult conditions on the North America-South America route, supported by healthy international demand within South America.

African airlinesenjoyed an 8.2% rise in demand compared to November 2015.

De Juniac offered both optimism and a warning as he commented on the data. "The airline industry continues to deliver strong results. In 2017, for a 3rd consecutive year, the industry’s return on invested capital will exceed the cost of capital. Passengers benefit from the industry’s success. Travel has never been more accessible - with great fares, many options and more destinations.”

He then added: “Nevertheless uncertainty lies ahead. The threat of terrorism, questions over the durability of the economic upswing, rising oil prices and increasing protectionist rhetoric are among the concerns. The industry has reshaped itself and strengthened its resilience to shocks. We should see another solid year of collective profitability for the airlines in 2017. But we must be vigilant."




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