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Stat: Airfares Fall 5 PercentDecember 3, 2015
The International Air Transport Association (IATA) has released its global passenger traffic results for October showing continued strong demand growth for both domestic and international traffic compared to the year-ago period.
Growth in air travel has been stimulated by lower fares, particularly for leisure travel. Data for the first eight months of the year show a 5 percent fall in average fares in currency-adjusted terms. It is estimated that the fall in fares has supported approximately 3 percentage points of the rise in traffic year-to-date. Total revenue passenger kilometers (RPKs) rose 7.5 percent, which was in line with the 7.4 percent year-over-year expansion seen in September. October capacity (available seat kilometers or ASKs) increased by 5.7 percent, and load factor rose 1.4 percentage points to 80.5 percent.
“The air travel story is generally a good one. There are some weak spots. For example the Brazilian air transport sector is caught in perfect storm of a deepening recession, high costs and a weak currency. In most parts of the world we see strong demand for travel—exceeding the growth in capacity. Load factors are averaging over 80 percent and consumers are the big winners with fares trending downwards,” said Tony Tyler, IATA’s director general and CEO.
International Passenger Markets
October international passenger demand rose 7.6 percent compared to October 2014, with airlines in all regions recording growth. Total capacity climbed 6.1 percent, pushing up load factor 1.1 percentage points to 79.2 percent.
Asia-Pacific airlines’ October traffic increased 8.6 percent compared to the year-ago period. Significant declines in trade activity to/from Emerging Asia and slower than expected growth in the Chinese economy do not appear to be impacting on passenger demand. Capacity rose 6.6 percent and load factor gained 1.5 percentage points to 76.7 percent.
European carriers saw demand rise 6.7 percent, supported by economic recovery in the Eurozone. Capacity climbed 4.2 percent and load factor jumped 1.9 percentage points to 83.8 percent, highest among the regions.
North American airlines’ traffic rose 4.6 percent compared to October a year ago, continuing the healthy trend of recent months. Capacity climbed just 2.2 percent, propelling a 1.9 percentage point rise in load factor to 82.1 percent. Expectations for better economic performance are supporting travel demand.
Middle East carriers posted a 10.3 percent traffic increase in October. Capacity rose 12.7 percent, however, which caused load factor to slide 1.5 percentage points to 72.5 percent. The Middle East was the only region to see a decline in load factor for the month.
Latin American airlines experienced a 10 percent rise in October demand compared to the same month last year. Capacity increased by nearly the same amount and load factor edged up 0.1 percentage points to 80.5 percent. Solid trade activity has provided a boost to business-related international travel, notwithstanding economic weakness in Brazil and Argentina.
African airlines’ traffic climbed 6.7 percent in October, marking a fourth consecutive month of improvement compared to the year-ago period. However, fundamental economic drivers remain weak, so the result could also reflect volatility in reported volumes. Capacity rose 5.2 percent, with the result that load factor improved 1.0 percentage point to 67.4 percent.
“The end of the year is a festive time around the world,” said Tyler. “But this year’s celebrations will be juxtaposed against the somber reality of recent terrorist activity in the Middle East and Europe. This, by all indications, also includes the downing of Metrojet 9268 with the loss of all aboard. Acts of terror, whether they occur on a city street or at 30,000 feet, will not get the better of us, or succeed in limiting the possibilities of our world. The most important response to acts and threats of terrorism is to show that we will not let the terrorists change our lives.”