Advancing UK Aerospace, Defence, Security & Space Solutions Worldwide
  • Home
  • /
  • Aerospace
  • /
  • IATA reports solid passenger demand but freight still weak

Aerospace

IATA reports solid passenger demand but freight still weak

The International Air Transport Association (IATA) announced global passenger traffic results for May showing that demand (measured in revenue passenger kilometres, or RPKs) rose 4.5% compared to the same month in 2018.

This was in line with the revised April traffic growth of 4.4% and above the recent trough of 3.1% year-on-year growth recorded in March. However, it remains below the 20-year average growth rate of around 5.5%. Capacity (available seat kilometres or ASKs) climbed by a modest 2.7% and load factor rose 1.4 percentage points to 81.5%, surpassing last year’s record load factor of 80.1%.

Advertisement
ODU RT 2

“Passenger demand growth has slowed compared to the past two years. This is in line with slumping global trade, rising trade tensions and weakening business confidence. In this challenging environment, airlines are managing capacity carefully in order to optimize efficiency,” said Alexandre de Juniac (above), IATA’s Director General and CEO.

International Passenger Markets
International traffic demand rose 4.3% in May over the year-ago period, which was down from 5.1% growth in April. All regions recorded growth, led by airlines in Latin America. Total capacity climbed 2.1%, with load factor jumping 1.7 percentage points to 80.4%.

    European carriers' May demand climbed 5.4% over May 2018, a deterioration from the 7.7% year-over-year growth recorded in April. Capacity rose 4.6% and load factor was up 0.7 percentage point to 84.2%, which was the highest among regions. Most of the region's growth, however, occurred in the first half of 2018, with demand moving broadly sideways since then.
    Asia-Pacific airlines saw their traffic rise 4.0% in May compared to the year-ago period, an improvement over the 2.9% increase in April. Capacity increased 3.0%, and load factor edged up 0.8 percentage point to 78.6%. This is the second consecutive monthly increase in demand, but it still represents a soft outcome in a region that regularly saw double-digit growth rates over the past few years. The US-China trade tensions continue to weigh upon growth in the region.
    Middle East carriers' May demand growth decelerated to 0.8% compared to a year ago, from 3.3% annual growth recorded in April. This partly reflects the impact of the structural changes that are underway in the industry in the region. May capacity plunged 6.1%, and load factor soared 5 percentage points to 73.0%.
    North American airlines' traffic rose 4.8% in May compared to May 2018, a slowdown from 5.6% annual growth in April. Capacity climbed 2.7% and load factor strengthened 1.7 percentage points to 83.6%. The comparatively strong US domestic economy, and US dollar is helping to offset any trade-related softening in international travel.
    Latin American airlines experienced a strong 6.7% increase in traffic in May compared to the same month last year, which was well up from 5.1% growth in April. Passenger demand is currently holding up well, despite a challenging economic backdrop in a number of countries. Capacity climbed 4.0% and load factor jumped 2.1 percentage points to 84.0%, second highest among the regions.
    African airlines posted a 2.1% traffic rise in May compared to the year-ago period, which was up from just 1.1% growth in April. Capacity climbed 0.1% and load factor increased 1.3 percentage points to 67.0%. Traffic between Africa and Europe continues to expand strongly, but economic growth in South Africa – a key regional economy and air transport market– contracted sharply in the first quarter and this is adversely impacting air passenger demand. 

Domestic traffic increased 4.8% in May compared to May 2018, well above the 3% year-over-year rise recorded in April. Russia was the only market to see double-digit demand growth. Domestic capacity rose 3.8% and load factor climbed 0.8 percentage point to 83.4%.

    Russia's domestic traffic rose 10.6% year-over-year, which is up slightly from the 10.4% year-over-year growth recorded for April. Russia continues to benefit from favorable economic conditions and lower airfares.
    Japan's domestic traffic rose 6.6% in May, up from 4.1% growth in April and the strongest performance since summer 2017. Fare stimulation, combined with robust economic growth, contributed to the result.

"Aviation is the business of freedom, connecting people and trade and creating new opportunities for growth and development. But to be effective, the business of freedom relies on borders that are open to the movement of people and goods—and aircraft. In recent weeks, we have seen extensive airspace closures owing to political tensions. These closures have contributed to longer and less efficient routings, higher operating costs and increased carbon emissions. Without any compromise on safety, it is vital that governments work to minimize airspace closures so that the Business of Freedom can continue to deliver its benefits as efficiently as possible," said de Juniac.

Advertisement
ODU RT 2

Air Freight
For global air freight markets, data showed that demand, measured in freight tonne kilometres (FTKs), decreased by 3.4% in May 2019, compared to the same period in 2018. This was a slight improvement on the 5.6% contraction in April.

In seasonally-adjusted terms, the level of FTKs increased modestly for the third consecutive month, suggesting that the low point of this cycle may be behind us, although the market remains weak.

Freight capacity, measured in available freight tonne kilometers (AFTKs), rose by 1.3% year-on-year in May 2019. Capacity growth has now outstripped demand growth for the 13th consecutive month.

Air cargo demand has suffered from very weak global trade volumes and trade tensions between the US and China. This has contributed to declining new export orders. The indicator for new manufacturing export orders, part of the global Purchasing Managers Index (PMI), has indicated falling orders since September 2018.

“The impact of the US-China trade war on air freight volumes in May was clear. Year-on-year demand fell by 3.4%. It’s evidence of the economic damage that is done when barriers to trade are erected. Renewed efforts to ease the trade tensions coming on the sidelines of the G20 meeting are welcome. But even if those efforts are successful in the short-term, restoring business confidence and growing trade will take time. And we can expect the tough business environment for air cargo to continue,” said Alexandre de Juniac, IATA's Director General and CEO.  

 

Advertisement
Northrop Grumman 2 Northrop Grumman 2
Rolls-Royce’s Edward Prince to join UKEF Executive Team

Aerospace

Rolls-Royce’s Edward Prince to join UKEF Executive Team

20 December 2024

Senior Rolls-Royce plc executive Edward Prince has been appointed as Director of Large Corporates & International at UK Export Finance (UKEF).

NATS publishes Responsible Business Report

Aerospace

NATS publishes Responsible Business Report

19 December 2024

UK air traffic control service provider, NATS, has published its latest Responsible Business Report, which outlines the tangible progress made in all areas of sustainability for the year ended 31st March 2024.

Stansted to introduce barrier free system at forecourt drop off area

Aerospace

Stansted to introduce barrier free system at forecourt drop off area

18 December 2024

London Stansted is to introduce a new barrierless system for vehicles dropping off passengers at its Express Set Down (ESD) area as part of the airport’s £1.1 billion transformation programme.

GACA appoints CAAi to harmonise safety regulatory framework with EASA

Aerospace

GACA appoints CAAi to harmonise safety regulatory framework with EASA

17 December 2024

The General Authority of Civil Aviation (GACA) of Saudi Arabia has appointed CAA International (CAAi) - the UK Civil Aviation Authority’s technical cooperation arm - to harmonise Saudi Arabia’s aviation safety regulatory framework with the European Union Aviation Safety Agency (EASA).

Advertisement
ODU RT 2
RTX

Aerospace

RTX's Collins Aerospace upgrades King Air and Hawker aircraft avionics

17 December 2024

RTX's Collins Aerospace has announced a comprehensive avionics upgrade and modernisation programme for Beechcraft King Air and Hawker aircraft, spanning Collins' Pro Line Fusion and Pro Line 21 advanced avionics systems.

RTX

Aerospace

RTX's Pratt & Whitney GTF engine gains FAA certification for A321XLR

16 December 2024

RTX's Pratt & Whitney announced today that it has received US Federal Aviation Administration (FAA) certification for the GTF engine that will power the Airbus A321XLR aircraft.

Advertisement
ODU RT