IATA Says Demand “May Be Shifting Down A Gear”

Open Jaw

IATA announced global passenger traffic data for April showing that demand rose by 4.6% - the slowest pace since January 2015.

April capacity increased by 4.9%, and load factor slipped 0.3 percentage points to 79.1%.

The group that represents 260 airlines in 117 countries says the disruptive impact of the BRU attack weighed somewhat on its April figures. IATA estimates that, absent the impact of the attacks, demand growth would have been around 5%.

But there are hints that all is not well looking forward for an industry that has enjoyed rapid growth and record profit in the past couple of years.

“The disruptive impacts of the Brussels terror attacks will likely be short-lived. But there are some longer-term clouds over the pace of demand growth,” said Tony Tyler, IATA’s Director General & CEO. “The stimulus from lower oil prices appears to be tapering off. And the global economic situation is subdued. Demand is still growing, but we may be shifting down a gear.”

That could be bad news for airline stock prices, with investors still wary of an industry known for frequent swings.

As the Financial Times reported, Tyler’s warning “comes at the same time as airlines take delivery of new, bigger planes and manufacturers step up production to record rates.”

The Globe and Mail spoke with representatives of Canada’s 3 international airlines to gauge the impact on their summer bookings. Debbie Cabana said TS experienced an immediate impact on demand following the BRU attacks but that bookings returned to normal quickly.

At WS, Robert Palmer says that bookings on its new LGW routes are at or above expectations and AC’s Peter Fitzpatrick says the carrier’s outlook on the summer season remains the same and they expect a very strong 3rd quarter.

Leave a Comment...

(will not be published)