International Pax Demand Slows: Chinese Domestic Market Soars

Open Jaw

IATA reports that global passenger traffic results for November 2014 revealed the continuation of the healthy demand trend of recent months. Total revenue passenger kilometers (RPKs) rose 6.0% compared to November 2013, a slight rise from October numbers as well as the 10 yr. average growth rate of 5.6%.

Overall November capacity expanded by 5.4%, leading to a 0.5 percentage point rise in the load factor to 76.7%.

The airline association says growth was driven primarily by domestic markets which experienced a 6.9% increase in demand over the previous November. Chinese domestic travel (which rose 15.4% over the previous November) was the main contributor to this growth.

International travel, meanwhile, experienced a slight deceleration in growth towards the end of the year.

"November demand was healthy, but the overall picture is mixed. For example, strong traffic performance within China and India has not carried over into international demand for Asia-Pacific carriers. And while lower oil prices should be positive for economic activity, softening business confidence is having a dampening effect on international travel," said Tony Tyler, IATA’s Director General & CEO.

November 2014 international passenger demand was up 5.4% compared to the year-ago period, below the 6.1% year-to-date growth trend. Capacity rose 5.9% and the load factor dipped 0.3 percentage points to 75.1%. All regions except Africa recorded year-over-year increases in demand. However, compared to October, most regions reported slower demand growth for November.

North American airlines saw demand rise 2.0% over the 2013 period. This was an improvement over growth of 1.6% in October. November capacity rose 3.1%, causing load factor to fall 0.8 percentage points to 76.8%. The U.S. economy is a notable bright-spot among developed economies, and recent gains in trade volumes bode well for business-related travel.

Middle East carriers had the strongest traffic growth at 11.7%. This was the 4th consecutive month of double-digit year-over-year growth and the region’s economies are comparatively well placed to withstand plunging oil revenues.

African carriers were the only ones to see a decline in demand: November traffic fell 2.5% compared to the same month in 2013. Capacity fell 3.1%, causing load factor to rise 0.4 percentage points to 63.8%, the lowest for any region. Rather than having anything to do with Ebola, IATA says the recent weakness appears to reflect adverse economic developments in parts of the continent including Nigeria, which is highly reliant on oil revenues.

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