Passenger Demand Losing Momentum

Open Jaw

IATA says pax demand in June rose 5.2% compared over last June and up slightly from the 4.8% increase recorded in May. However, the upward trend in seasonally-adjusted traffic has moderated since January and the airline organization sees cause for concern.

"The demand for travel continues to increase, but at a slower pace. The fragile and uncertain economic backdrop, political shocks and a wave of terrorist attacks are all contributing to a softer demand environment," said Tony Tyler, IATA’s Director General & CEO. 

June international pax demand rose 5.0% compared to June 2015. All regions recorded growth, led by airlines in Latin America. Capacity climbed 6.4%, causing load factor to slide 1.1 percentage points to 79.4%.

North American airlines’demand rose 4.0%, well up on the 0.5% year-over-year growth recorded in May. Capacity climbed 4.7%, causing load factor to dip 0.6 percentage points to 84.3%, still the highest among regions.

European carrierssaw demand rise 2.1%, the smallest increase among regions, reflecting the negative impact of recent terrorism. While demand tends to recover reasonably quickly after such events, the repeated nature of the attacks may have a more lasting impact, IATA says.

Latin American airlines experienced an 8.8% rise in demand compared to the same month last year, suggesting that carriers there have flown out of the soft patch seen in the 1st quarter. Capacity increased by 5.2% and load factor rose 2.7 percentage points to 82.4%.

“It is too soon to know whether recent terrorist attacks will have a long-term negative influence on demand, nor what will be the impact of Brexit and the events in Turkey,” said Tony Tyler, IATA’s Director General & CEO. “But it is vital that governments recognize and support aviation’s ability to contribute to global economic well-being and better understanding across cultural and political borders.”

(will not be published)