Passenger demand remains strong: IATA

AUG 7, 2015: “June was another healthy month for demand for air connectivity, although slower trade activity in emerging Asia-Pacific markets and the impact of the Greek debt crisis on European travel remain worrisome,” commented Tony Tyler, IATA’s Director General and CEO, on a recently released IATA report.

The International Air Transport Association (IATA) announced global passenger traffic results (revenue passenger kilometers or RPKs) for June showing a 5.7 percent increase in demand compared to June 2014.

June international passenger demand rose 5.3 percent compared to June 2014. Airlines in all regions except Africa recorded growth although there was wide variation between regions. Capacity climbed 6 percent pushing down load factor 0.5 percentage points to 80.4 percent.

Asia-Pacific airlines’ June traffic rose 6.8 percent compared to the year-ago period, which was down from a 9.3 percent rise recorded in May. Capacity climbed 5.8 percent and load factor increased 0.7 percentage points to 78.1 percent. Latest data show that trade activity to/from Emerging Asia is down 8 percent compared to the end of 2014.

European carriers saw demand climb 4.1 percent in June versus June 2014. Although business activity indicators suggest that the region’s economic recovery is on track, consumer sentiment has been hampered by events in Greece including the potential consequences of the country exiting the Eurozone. Capacity rose 3.5 percent and load factor climbed 0.4 percentage points to 84 percent.

North American airlines experienced a 2.7 percent increase in traffic, which was above the 2 percent increase recorded in May. Capacity rose 2.8 percent.

Latin American airlines had a 5.9 percent rise in traffic compared to June 2014. Capacity rose 5.8 percent, causing load factor to edge up 0.1 percentage points to 79.6 percent.

Russian air travel experienced a spike in June (+9.5 percennt) as a combination of added capacity and a weak ruble helped boost domestic air travel, despite the country’s economic woes. The increase was nonetheless outstripped by the 16.6 percent increase in domestic capacity.

“Midway through the peak summer travel season in the Northern Hemisphere, demand for connectivity remains high. Tourism is the life blood of many economies and much of it arrives by air. Unfortunately, too often governments appear not to realize this, burdening airlines and travelers with high fees and taxes. The short-term financial benefit comes at the long-term expense of the economy. The French government’s decision to allow annual charges increases at Paris’s two airports between 2016 and 2020 is the latest example—incredible for a country where tourism and global business play such big economic roles. Dialogue between industry and government is critical to finding win-win solutions.”

“That is what we are hoping for in India with the imminent announcement of its new aviation policy. Improved air connectivity would make a major contribution to the government’s efforts to make it easier to do business in India. For that, we need a policy framework that reduces onerous taxes and regulation and that continues to improve infrastructure and cost efficiency. Aviation has much to contribute to any country’s economy. But it will not happen by accident. The peak travel season should serve as a reminder to all governments of the importance of aviation policies focused on enabling aviation to catalyze economic growth,” said Tyler.