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Global passenger demand slowed in September

written by australianaviation.com.au | November 7, 2017

International carriers at Sydney Airport. (Seth Jaworski)
International carriers at Sydney Airport. (Seth Jaworski)

Demand for air travel grew at its slowest pace in seven months in September as two hurricanes that swept through the Americas devastated communities in the region and prompted travellers to reconsider travel plans, a report says.

The International Air Transport Association (IATA) says total revenue passenger kilometres (RPK) rose 5.7 per cent in September, compared with the same month a year earlier. It was the slowest year-on-year increase since February.

Further, passenger volumes were lower in month-on-month terms in September for only the third time in past 12 months.

“This month-on-month decline mainly reflected the impact of disruption caused by Hurricanes Irma and Maria on airline operations in the Americas,” the IATA report said.

“There is likely to be significant ongoing impacts on passenger traffic to and from the most affected Caribbean islands.”

On a positive note, IATA said operations at major US airports had since returned to normal, suggesting the industry-wide impact would not be long-lasting.

“Our hearts go out to all those affected by the recent extreme weather events, which uprooted lives and communities and dealt heavy blows to local economies in the affected areas,” IATA chief executive and director general Alexandre de Juniac said in a statement.


“It is at times like these that we truly see the vital role that aviation plays in disaster relief, bringing in much needed first responders and aid workers, as well as supplies, food and medicines to those in need.”

There were also weather-related impacts in Japan, where Typhoon Talim led to the largest month-on-month decline in RPKs in that country in more than six years.

IATA said capacity, measured by available seat kilometres (ASKs), rose by 5.3 per cent. With demand growing faster than capacity, average load factors improved 0.3 percentage points to 81.6 per cent, a record high for the month of September.


Airlines around the world experienced the fastest growth in demand for more than a decade in the first half of calendar 2017, with the 7.9 per cent lift in RPKs the largest first half improvement since 2005, the IATA said recently.

While the pace of expansion has slowed, IATA forecasts suggested the industry was still on track to post another year of above trend growth in calendar 2017.

“September’s growth in passenger demand was healthy, notwithstanding the heavy impacts of extreme weather events on the Americas,” de Juniac said.

“Global economic conditions support rising passenger demand, but with higher cost inputs, the demand stimulation from lower fares has waned, suggesting a moderating trend in traffic growth.”

All regions reported growth, with airlines in Asia Pacific leading the way thanks to an 8.7 per cent improvement in RPKs in September, while capacity grew 7.8 per cent. As a consequence of demand rising faster than capacity, load factors rose 0.6 percentage points to 78.3 per cent.

“A solid regional economic backdrop, helped by robust growth in China, is supporting passenger demand within the region,” IATA said.

North America posted the slowest RPK growth at 0.4 per cent while ASKs rose two per cent, leading to a 1.3 percentage point decline in load factors to 82 per cent.

“In addition to the impacts of hurricanes Irma and Maria, anecdotal evidence continues to suggest that inbound traffic to the US is being deterred by additional security measures now involved in traveling to the country,” IATA said.

The IATA report showed the Australian domestic market declined in September, with airlines cutting capacity in an effort to better match demand with the number of seats in the market.

Local carriers experienced a 1.6 per cent fall in RPKs, while ASKs were down 3.1 per cent. That led to load factors rising 1.2 percentage points to 79.5 per cent.

The IATA report said it was the highest reported load factor for the Australian domestic market the month of September since 2011.

“RPKs have been trending sideways in seasonally adjusted terms over the past year or so, although domestic capacity has trended down over the same period,” IATA said of the Australian market.

Meanwhile, Qantas said in its first quarter trading update has guided the market to a 2-3 per cent reduction in domestic capacity across its Qantas and Jetstar operations for the first half of 2017/18, a steeper cut than it initially flagged in August.

The company’s latest traffic figures showed the airline group cut ASKs in the domestic marketby 2.7 per cent in the three months to September 30 2017.

Qantas chief executive Alan Joyce said on October 26 the domestic market was healthy but remained very competitive.

Virgin Australia is yet to publish its first quarter trading update.

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