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Abu Dhabi, UAEMonday 9 December 2019

Global passenger demand grows in September but below industry average

September marked the eighth consecutive month of growth below long term industry trends, Iata says
The International Air Transport Association says September traffic growth remains below industry average. Reuters

Global passenger demand increased 3.8 per cent year-on-year, but remained weaker than the industry’s long-term growth trend, as trade headwinds and a global economic slowdown weighed on travel demand in most regions, according to the International Air Transport Association (Iata).

Though demand, measured in revenue passenger kilometres, was up annually it remained flat compared with August, Iata, the global aviation trade body, said on Sunday. Global passenger capacity - available seat kilometres, or ASK - rose by 3.3 per cent on an annual basis, while load factor, a measure of capacity utilisation by global airlines, climbed 0.4 per cent to 81.9 per cent.

“September marked the eighth consecutive month of below average demand growth,” Alexandre de Juniac, Iata’s director general, said. “Given the environment of declining world trade activity and tariff wars, rising political and geopolitical tensions and a slowing global economy, it is difficult to see the trend reversing in the near term.”

In the Middle East passenger traffic grew 1.8 per cent in September, lower than the 2.9 per cent rise in August. Capacity was up just 0.2 per cent, with the average load factor climbing 1.2 percentage points to 75.2 as international "traffic growth continues to be affected by a mix of structural challenges in some of the region’s large airlines and weaker business confidence in some of the regional countries," Iata noted.

Asia-Pacific carriers saw a 3.6 per cent rise in September traffic, compared to the year-ago period. The performance is an improvement on the 3.3 per cent annual growth recorded in August. However, “despite the uptick, growth remains well below that seen in 2018,” mainly driven by “weaker economic backdrop in some of the region’s key states as well as trade tensions between the US and China and, more recently, between Japan and South Korea”, Iata said.

European airlines registered a 2.9 per cent rise in September traffic, the weakest performance this year by the region's airlines, which recorded a 4.2 per cent year-on-year rise in August. In addition to slowing economic activity and faltering business confidence in many European countries, the market has faced airlines going out of business and pilot strikes.

African airlines’ traffic climbed 0.9 per cent in September, a steep fall from the 4.1 per cent growth recorded in August, Iata said.

While overall international passenger demand in September rose 3 per cent from a year earlier, which was slower the than 3.6 per cent rate of growth achieved in August, the demand for domestic travel climbed 5.3 per cent in September, which was an improvement over the 4.7 per cent annual growth recorded in August.

“These are challenging days for the global air transport industry. Pressure is coming from many directions. In a matter of weeks, four airlines in Europe went bust,” Mr de Juniac, who is also Iata’s chief executive, said.

“At times like these, governments should recognise the power of aviation connectivity to ignite the economy and drive job creation.”

Last month the International Monetary Fund said the global economy is in a “synchronised slowdown” and revised its growth forecast for 2019 downwards for a fifth time to 3 per cent, the slowest expansion since the 2008 global financial crisis. The IMF's adjustment comes in the wake of protectionist policies and increased uncertainty related to trade and geopolitics that have strained emerging market economies.

Updated: November 10, 2019 04:47 PM