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Friday, 4 May 2018

IATA REPORT : Passenger Demand Accelerates in March, Load Factor Sets Another Record

IATA
Passenger Demand Accelerates in March, Load Factor Sets Another Record
    
Geneva - The International Air Transport Association (IATA) announced global passenger traffic results for March 2018 showing that demand (measured in revenue passenger kilometers, or RPKs) rose 9.5%, compared to the same month a year ago, the fastest pace in 12 months. Capacity (available seat kilometers, or ASKs) grew 6.4% and load factor climbed 2.3 percentage points to 82.4%, which set a record for the month, following on the record set in February. All regions except for the Middle East posted record load factors.
"Demand for air travel remains strong, supported by the comparatively healthy economic backdrop and business confidence levels. But rising cost inputs—particularly fuel prices—suggest that any demand boosts from lower fares will moderate going into the second quarter," said Alexandre de Juniac, IATA’s Director General and CEO.     
March 2018
(% year-on-year)
World share¹
RPK
ASK
PLF
(%-pt)²         
PLF
(level)³ 
        
Total Market
100.0%
9.5%
6.4%
2.3%      
82.4%
Africa
2.2%
6.1%
2.7%
2.3%
71.6%
Asia Pacific
33.7%      
12.0%
9.1%
2.1%
82.3%
Europe
26.5%
9.5%
6.1%
2.6%
83.9%
Latin America
5.2%
8.5%
6.8%      
1.3%
81.3%
Middle East
9.5%
10.6%
4.2%      
4.4%
76.6%
North America
23.0%      
6.3%      
4.1%
1.7%
85.3%
   ¹% of industry RPKs in 2017   ²Year-on-year change in load factor   ³Load factor level   
International Passenger Markets
March international passenger demand rose 10.6% compared to March 2017, which was up from 7.4% year-over-year growth recorded in February. All regions showed strong increases. Total capacity climbed 6.6%, and load factor improved 2.9 percentage points to 81.5%.
  • Asia-Pacific airlines’ traffic soared 11.6% in March, compared to the year-ago period. Passenger traffic is continuing to trend upwards, supported by strong regional economic growth and ongoing expansion in the number of airport-pair options for travelers. Capacity increased 8.2%, and load factor rose 2.5 percentage points to 80.9%.
  • European carriers saw March traffic climb 9.8% over March 2017, up from 6.9% annual growth in February. Business confidence in the most-open countries in the region has been hit by trade tensions in recent months, but economic conditions remain broadly supportive. As with Asia-Pacific region, demand is also being stimulated by increases in the number of nonstop airport-pairs. March capacity rose 6.4% and load factor was up 2.6 percentage points to 84.6%, highest among regions.
  • Middle East carriers’ traffic jumped 10.7% in March, much improved from the 4.1% year-over-year increase recorded in February. This reflects healthy growth in the market between the Middle East and Asia. Demand also shows signs of stabilization on Middle East to North America routes, following the disruption caused in the first half of 2017 by the now-lifted ban on large portable electronic devices, as well as a wider impact stemming from the proposed travel restrictions to the US. Capacity increased 4.3%, and load factor jumped 4.4 percentage points to 76.7%.
  • North American airlines posted a 9.5% traffic rise in March compared to the year-ago period, well above the 5-year average growth rate of 3.6%. Capacity climbed 4.9% and load factor was up 3.5 percentage points to 83.5%, which was the second highest among the regions. The weakening US dollar is having a positive effect on inbound traffic, while the comparatively robust domestic economic backdrop is supporting outbound demand.
  • Latin American airlines had an 11.8% increase in March traffic, which was the largest increase among the regions for a third month in a row. March capacity climbed 10.0% compared to a year ago, and load factor edged up 1.3 percentage points to 81.8%. Traffic continues to recover from the disruptions caused by the harsh hurricane season in the third quarter of 2017, driven in part by economic recovery in Brazil.
  • African airlines continued to enjoy very strong demand as well, with traffic up 11.2% compared to March 2017, which was more than twice the 5-year average pace of 4.8%. Airlines here are seeing healthy growth on routes to/from Europe and Asia, while the region’s two largest economies—Nigeria and South Africa—continue to improve. Capacity climbed 6.7%, and load factor strengthened 2.9 percentage points to 71.0%.
Domestic Passenger Markets       
Domestic demand rose 7.8% in March, which was a slight deceleration from 8.2% growth recorded in February, driven primarily by developments in the US market. Domestic capacity climbed 6.2%, and load factor lifted 1.3 percentage points to 84.0%.    
March 2018
(% year-on-year)       
World share¹
RPK
ASK
PLF     
(%-pt)²     
PLF
(level)³  
Domestic
36.2%     
7.8%
6.2%    
1.3%      
84.0% 
Australia
0.9%
3.6%
0.0%
2.7%
78.9%
Brazil 
1.2%
2.3%
0.8%
1.2%
80.2%
China P.R             
9.1%
15.0%
13.8%       
0.9%
85.2%             
India             
1.4%
27.9%
18.1%
6.7%
87.8%
Japan             
1.1%
0.9%
1.2%             
-0.2%
74.7%
Russian Fed.             
1.4%
5.9%         
3.1% 
2.1%           
78.1%
US
14.5%
4.7%      
3.7%
0.8%
86.5%
¹% of industry RPKs in 2017   ²Year-on-year change in load factor   ³Load factor level  *Note: the seven domestic passenger markets for which broken-down data are available account for 30% of global total RPKs and approximately 82% of total domestic RPKs                               
  • US domestic growth slowed to 4.7% in March, compared to 6.1% year-over-year growth recorded in February. This had been anticipated and relates more to traffic trends last year than to any specific weakening in the US market.
  • China’s domestic traffic grew 15% in March compared to the year-ago period. This was the strongest pace in five months and is being supported by growth in the services sector.
The Bottom line      
"The strong first quarter provides healthy momentum heading into the peak travel period in the Northern Hemisphere. Benign economic conditions are supporting—and being supported by—good demand for air travel. It’s a mutually-beneficial effect that smart governments recognize and encourage, by embracing affordable, quality aviation infrastructure and reasonable commercial regulation. But we need to deliver that message every day. The setback to modernizing air traffic management in the US, and a proposal to stop construction of the new airport in Mexico, are reminders of that fact," said de Juniac.     
View full March passenger traffic analysis
     
Notes for Editors:
  • IATA (International Air Transport Association) represents some 280 airlines comprising 83% of global air traffic.
  • You can follow us at http://twitter.com/iata2press for news specially catered for the media.
  • All figures are provisional and represent total reporting at time of publication plus estimates for missing data. Historic figures may be revised.
  • Domestic RPKs accounted for about 36% of the total market. It is most important for North American airlines as it is about 66% of their operations. In Latin America, domestic travel accounts for 46% of operations, primarily owing to the large Brazilian market. For Asia-Pacific carriers, the large markets in India, China and Japan mean that domestic travel accounts for 45% of the region’s operations. It is less important for Europe and most of Africa where domestic travel represents just 11% and 14% of operations, respectively. And it is negligible for Middle Eastern carriers for whom domestic travel represents just 4% of operations.
  • Explanation of measurement terms:
    • RPK: Revenue Passenger Kilometers measures actual passenger traffic
    • ASK: Available Seat Kilometers measures available passenger capacity
    • PLF: Passenger Load Factor is % of ASKs used.
  • IATA statistics cover international and domestic scheduled air traffic for IATA member and non-member airlines.
  • Total passenger traffic market shares by region of carriers in terms of RPK are: Asia-Pacific 33.7%, Europe 26.5%, North America 23.0%, Middle East 9.5%, Latin America 5.2%, and Africa 2.2%.   



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