Passenger growth hits seventh-month high in September

written by australianaviation.com.au | November 7, 2016

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Global air traffic grew at its fastest pace in seven months in September as lower airfares spur demand, new figures show.

The International Air Transport Association (IATA) monthly report showed passenger demand, measured by revenue passenger kilometres (RPK), rose 7.0 per cent in September, compared with the prior corresponding period. It was the highest result since February.

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There was double-digit growth in RPKs among airlines in the Middle East (11 per cent) and Asia Pacific (10.2 per cent), with the smallest increase coming in North America, where demand was up a still decent 4.2 per cent.

While terrorist activity and some regional economic jitters continued to act as headwinds for aviation, travellers were increasingly being tempted by bargain basement ticket prices.

“Air passenger demand has been stimulated by lower airfares, reflecting the lagged effects of lower oil prices and broader competitive pressures in the market,” the IATA report said.

However, IATA cautioned that the “biggest stimulus from this factor may not be behind us” as airlines seek to stabilise yields.

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“Certainly, the steep downward trend in yields that was a feature of early 2016 has paused in recent months and the majority of respondents to our latest quarterly business confidence surgery reported that they expect passenger yields to remain unchanged in the year ahead.

“This contrasts with the results from the previous surgery, when the majority of respondents expected further falls in yields over the year ahead.”

IATA figures showed the Australian domestic market grew capacity, measured by available seat kilometres (ASK) a slender 0.5 per cent in September, compared with the prior corresponding period, while RPKs were up 4.2 per cent.

As a result, load factors climbed 2.9 percentage points to 80.3 per cent.

The IATA report said any upward trend in RPKs remained “very modest”, given passenger traffic had increased at an annualised pace of just 1.1 per cent over the past three years.

IATA chief executive and director general Alexandre de Juniac welcomed the healthy growth in passenger traffic in September.

“Importantly, this rebound from August weakness suggests that travel demand is showing its resilience in the aftermath of terror attacks,” de Juniac said in a statement.

“We must, of course, be ever-alert to the ongoing terror threat. And overall the industry is still vulnerable to being buffeted by rising geopolitical tensions, protectionist political agendas, and weak economic fundamentals.

“This will still be a good year for the airline industry’s performance, but our profitability will continue to be hard-won.”

IATA has about 260 member airlines and represents roughly 83 per cent of global air traffic.

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