GENEVA, 15 January 2018: Airlines are heading for a robust performance in 2018 based on positive November data from the International Air Transport Association (IATA).
IATA released details of global passenger traffic results for November 2017 showing continued robust demand.
Revenue passenger kilometers (RPKs) rose 8.0% compared to November 2016, the fastest growth rate in five months and up from a 7.3% year-over-year rise in October.
Capacity (available seat kilometers or ASKs) increased by 6.3%, and load factor rose 1.2 percentage points to 80.2%.
“The airline industry is in a good place entering 2018. November’s strong demand gives the industry momentum… Passengers not only have more travel choices than ever, the cost of travel in real terms has never been cheaper,” said IATA’s director general and CEO, Alexandre de Juniac.
“We expect 2018 to be the fourth year in a row where the industry’s return on invested capital will exceed the cost of capital. In sum, we begin the New Year with confidence.”
But he conceded there were challenges such as security threats, while infrastructure issues persist. Fees and charges are a growing part of the cost base and in many cases airports and air traffic management struggle to keep pace with demand and technology advancements.
International Passenger Markets
November international passenger demand rose 8.1% compared to the year-on-year, an increase from 7.3% in October. All regions showed growth, led for the third consecutive month by carriers in the Asia-Pacific region. Total capacity climbed 6.6%, and load factor increased 1.1 percentage points to 78.2%.
Asia-Pacific airlines’ November traffic climbed 10.8% compared to the year-ago period, driven by strong regional economic growth and continuing expansion of options for travellers. Capacity increased 8.7% and load factor rose 1.5 percentage points to 78.6%.
European carriers saw demand increase by 7.9% in November 2017. Economic conditions in the region remain very favourable, with business confidence recently having risen to its strongest level in seven years. Capacity climbed 6.2% and load factor rose 1.3 percentage points to 81.9%, which was tied with Latin America as the highest load factor among the regions.
Middle East carriers had a 4.9% demand increase, which was the lowest among the regions. The market segment to and from North America continues to be affected by the now-lifted ban on personal electronic devices, as well as a wider impact stemming from the proposed travel restrictions to the US from certain countries. Capacity rose 4.3% and load factor lifted 0.4 percentage point to 70.1%.
North American airlines’ traffic climbed 6.4%, in November. Capacity rose 6.1% and load factor edged up 0.2 percentage point to 79.1%. The relatively vigorous economic backdrop is supporting outbound passenger demand, but this appears partly to be offset by a negative impact on inbound travel to the US from the additional security measures involved with traveling there.
Latin American airlines’ November traffic climbed 7.2% compared to November 2016. This was broadly in line with the region’s five-year average growth rate, although on a seasonally-adjusted basis, volumes are still below the peak level reached in July 2017. Capacity also increased by 7.2%, keeping load factor flat at 81.9%.
African airlines experienced a 7.9% rise in demand compared to November 2016. Volumes have started to trend upwards strongly again in seasonally-adjusted terms in recent months, in line with an improvement in business confidence in key economies including Kenya and Nigeria. Indicators in South Africa, by contrast, are still consistent with falling economic activity. Capacity rose 3.7% and load factor climbed 2.7 percentage points to 68.3%.