JULY PASSENGER TRAVEL SHOWS STRONG GROWTH: IATA
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The International Air Transport Association (IATA) announced global passenger traffic results for July showing demand growth of 5.3 per cent (measured in revenue passenger kilometers or RPKs) over the previous July. Capacity expanded exactly in tandem with demand (5.3 per cent), resulting in a global load factor of 82.3 per cent, unchanged from last year.
“July was another strong month of growth for air travel. People are connecting by air in ever greater numbers. That’s true across all regions. Despite the various economic challenges, the outlook for passenger travel remains broadly positive. The overall sluggishness at the beginning of the year appears to be behind us with growth in China and other emerging economies offsetting recent deterioration in the Eurozone,” said Tony Tyler, Director General and CEO, IATA.
July international passenger demand rose by 5.5 per cent compared to the same month in 2013. This was outstripped by a capacity expansion of 6.2 per cent which resulted in a slight weakening of the load factor to 81.9 per cent (down 0.5 percentage points from the year-ago period, but still at a very high level).
Asia Pacific airlines are benefitting from an improved economic environment. Demand growth was slightly above the global average at 5.6 per cent which lagged a capacity increase of 6.8 per cent. Load factor fell 0.9 percentage points to 78.9 per cent. The biggest factor affecting demand developments is the response of the Chinese economy to stimulus measures which saw year-on-year GDP growth reach 7.5 per cent in July.
Demand on domestic routes rose by 4.9 per cent in July over the previous year, ahead of a 3.5 per cent capacity increase, pushing load factor up 1.1 percentage points to 83.0 per cent. The strongest growth was recorded in China (8.8 per cent) and Russia (9.9 per cent).
India’s domestic market increased by a solid 6 per cent in July over the previous year. This could be an early sign of the success of the new government’s business-friendly stance. However, the government’s July budget announcement showed little spending stimulus which could keep India’s growth trend below the pace of other emerging markets.
“Airlines reported growth in July, which is a positive story for the global economy. Robust economic conditions support the expansion of travel. In turn connectivity stimulates economic growth and creates jobs. It’s a tried and tested virtuous circle. And the expectation is for continued solid growth over the remainder of 2014,” said Tyler.