August sees moderate pick-up in passenger demand

Middle Eastern airlines posted a 2.9% traffic increase in August

August international passenger demand rose 3.3% compared to August 2018, improving from a 2.8% year-over-year growth achieved in July
August international passenger demand rose 3.3% compared to August 2018, improving from a 2.8% year-over-year growth achieved in July

According to the International Air Transport Association (IATA) global passenger traffic data for August 201, demand rose 3.8% compared to the year-ago period. 

August capacity increased by 3.5%. Load factor climbed 0.3%  to 85.7%, which was a new monthly record, as airlines continue to maximise asset use.

“While we saw a pick-up in passenger demand in August compared to July, growth remains below the long-term trend and well-down on the roughly 8.5% annual growth seen over the 2016 to Q1 2018 period. This reflects the impact of economic slowdowns in some key markets, uncertainty over Brexit and the trade war between the US and China. Nonetheless, airlines are doing a great job of matching capacity to demand. With passenger load factors reaching a new high of 85.7% this is good for overall efficiency and passengers’ individual carbon footprint,” said IATA’s CEO, Alexandre de Juniac.

August international passenger demand rose 3.3% compared to August 2018, improving from a 2.8% year-over-year growth achieved in July. With the exception of Latin America, all regions recorded increases, led by airlines in Africa. Capacity climbed 2.9% and load factor edged up 0.3% to 85.6%.

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Middle Eastern airlines posted a 2.9% traffic increase in August, which was an increase from a 1.7% rise in July. While this was better than the average of the past twelve months, it remains far below the double-digit growth trend of recent years.

Falling business confidence in parts of the region, combined with some key airlines going through a process of structural change and geopolitical tensions are all likely to be contributing factors. Capacity increased 1.3%, with load factor rising 1.3 percentage points to 82.4%.

Asia-Pacific airlines’ August traffic increased 3.5% compared to the year-ago period, which was an acceleration compared to a 2.6% rise in July. However, this remains well below the long-term average growth rate of around 6.5%, reflecting slowing economic growth in India and Australia as well as the impact of trade disputes. Capacity rose 3.9% and load factor slid 0.4 percentage point to 82.8%.

North American carriers’ international demand rose 2.5% compared to August a year ago, up from a 1.4% increase in July. Capacity rose 1.3%, and load factor grew by 1.0 percentage point to 88.3%.

As with the Middle East and Asia Pacific, this performance represents an improvement from July, but remains relatively soft compared to long-term norms, most likely reflecting trade tensions and slowing global demand.

African airlines’ traffic climbed 4.1% in August, up from 3.2% in July. This solid performance comes after South Africa – the region’s second largest economy – returned to positive economic growth in Q2 2019. Capacity rose 6.1%, however, and load factor dipped 1.4 percentage points to 75.6%.

Russian airlines saw domestic traffic climb 6.0% in August, down from 6.8% growth in July and below the long-term average growth rate in the market of around 10%.

The 40th Assembly of the International Civil Aviation Organisation (ICAO) ended last week with progress made by governments in support of the industry’s environmental goals.

The Assembly passed a resolution that reaffirmed and strengthened its support for the implementation of the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) that begins in 2020. It also directed the ICAO Council to report to the next Assembly on options for the adoption of a long-term aspirational goal for reducing carbon emissions from international aviation.

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