Stats: Air Travel Demand Growth Slows to 6.2% in July

Airplane cabin with passengers
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The International Air Transport Association (IATA) has announced healthy global passenger demand for July with all regions reporting growth. Total revenue passenger kilometers (RPKs) rose 6.2 percent, compared to the same month last year. While this was down from 8.1 percent year-over-year growth in June, it nevertheless marked a solid start to the peak passenger demand season, the IATA said. Monthly capacity (available seat kilometers or ASKs) increased by 5.5 percent and load factor rose 0.6 percentage point to a record high for July of 85.2 percent.

“The industry posted another month of solid traffic growth. And the record load factor shows that airlines are becoming even more efficient in terms of deploying capacity to meet demand. However, rising costs -- particularly fuel -- will likely limit the stimulus we would expect from lower airfares. Therefore, we do expect to see a continued slowing of growth compared to 2017,” said Alexandre de Juniac, IATA’s director general and CEO, in a written statement.

International Passenger Markets

July international passenger demand rose 5.3 percent compared to July 2017, which was a deceleration compared to the 8.2 percent growth recorded in June. Total capacity climbed 4.7 percent, and load factor edged up half a percentage point to 85.0 percent. All regions reported growth, led by Asia-Pacific for the first time in three months.

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Asia-Pacific airlines’ July traffic rose 7.5 percent over the year-ago period, a slowdown compared to June growth of 9.6 percent. Capacity increased 6.0 percent and load factor rose 1.1 percentage points to 82.1 percent. Growth is being supported by a combination of robust regional economic growth and an increase in route options for travelers.

European carriers posted a 4.4 percent rise in traffic for July compared to a year ago, down from 7.1 percent annual growth in June. On a seasonally-adjusted basis, passenger volumes have been tracking sideways for the past three months, reflecting mixed developments on the economic front and possible traffic impacts related to air traffic control strikes across the region. Capacity rose 3.9 percent, and load factor climbed 0.5 percentage point to 89.1 percent, highest among the regions. 

Middle East carriers had a 4.8 percent increase in demand for July, well down on the 11.2 percent growth recorded for June, although this mainly is attributable to volatility in the data a year ago, rather than any major new developments. The region has been negatively impacted by a number of policy measures over the past 18 months, including the ban on portable electronic devices and travel restrictions. July capacity climbed 6.5 percent compared to a year ago and load factor dropped 1.3 percentage points to 80.3 percent.

North American airlines’ traffic climbed 4.1 percent compared to July a year ago. This was down from 6.0 percent growth in June, but still ahead of the 5-year average pace for carriers in the region as strong momentum in the U.S. economy is helping underpin a pick-up in international demand for airlines there. July capacity rose 2.8 percent with the result that load factor climbed 1.1 percentage points to 87.2 percent, second highest among the regions. 

Latin American airlines experienced a 3.8 percent rise in traffic in July, the slowest growth among the regions and a decline from 5.6 percent year-over-year growth in June. Capacity rose 4.6 percent and load factor slid 0.6 percentage point to 84.2 percent. Signs of softening demand have come alongside disruption from the general strikes in Brazil.

African airlines’ July traffic rose 6.8 percent, second highest among the regions. Although this represented a decline from 11.0 percent growth recorded in June, the seasonally-adjusted trend remains strong. Capacity rose 3.9 percent, and load factor jumped 2.1 percentage points to 76.0 percent. Higher oil and commodity prices are supporting economies in a number of countries.

Domestic Passenger Markets             

Domestic travel demand grew by 7.8 percent year-on-year in July, broadly in line with 8.0 percent growth recorded in June. All markets saw annual increases, with China, India and Russia posting double-digit growth rates. Domestic capacity climbed 6.9 percent, and load factor rose 0.8 percentage point to 85.6 percent.

Russia’s domestic traffic soared 10.8 percent in July--a 13-month high--as rising world oil prices are helping support economic activity as well as incomes and jobs.

U.S. domestic traffic also surged to a 5-month high of 5.6 percent, well above the five-year average of 4.2 percent, boosted by the rising U.S. economy. 

Source: IATA

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