IATA’s MAY Numbers: Global Demand Maintains Altitude
Bruce Parkinson, Open Jaw
IATA has announced global passenger traffic results for MAY, with demand rising 7.7% compared to the same month in 2016. While this was slower than the 10.9% growth recorded in APR, it was still was well ahead of 5- and 10-year average growth rates.
Capacity climbed 6.1%, and load factor rose 1.2 percentage points to 80.1%, a record high for the month. All regions except for the Middle East and North America posted record-high May load factors.
After adjusting for inflation, airfares at the start of the second quarter were around 6% lower than a year ago. IATA estimates that this contributed to around 40% of the annual growth in passenger traffic seen in May.
However, the degree of fare stimulus is around half that seen in the second half of 2016. IATA says this stimulus is likely to fade further in light of rising airline cost pressures, while business confidence has softened. However, it says pax demand is likely to remain strong during the peak travel months of July and August.
"Passenger demand is solid. And we don’t foresee any weakening over the busy summer months in the Northern Hemisphere,” said Alexandre de Juniac, IATA’s Director General and CEO.
“But the rising price of fuel and other input costs is likely to see airlines’ ability to stimulate markets with lower fares taper over the coming months. In parallel, rising trade protectionism and barriers to travel are worrying trends that, if unchecked, could impact demand. As a business airlines depend on borders that are open to trade and people."