Air traffic growth slows, but demand soars within Asia

Passengers at Bangkok's Suvarnabhumi Airport
Passengers at Bangkok’s Suvarnabhumi Airport

The growth of the global air travel industry saw a marked slowdown in August 2016, but demand for domestic and intra-regional traffic in Asia remained strong.

According to the latest data from IATA, global growth fell to just +4.6% during the month, down from a revised +6.4% in July. And with seat capacity increasing, the average global load factor declined by almost a full percentage point to 83.8%.

“Growth in passenger demand dipped to 4.6%. While that’s disappointing compared to the previous month’s performance, it is still healthy growth. And although terrorist attacks in Europe and dampened demand, the impact is ebbing,” said Alexandre de Juniac, IATA’s director general & CEO.

But while many areas of the world are experiencing sluggish demand, Asia’s emerging domestic markets and intra-regional routes continue to soar.

IndiGo is now India's largest domestic carrier, by market share
IndiGo is now India’s largest domestic carrier, by market share

Traffic on flights within India (+23.2%) and mainland China (+12.0%) experienced double-digit growth in August, with India experiencing a boom that has now lasted approximately two years. For the first eight months of 2016, India’s domestic aviation demand has now increased 23.3% year-on-year, compared to the global domestic growth rate of +5.2%.

And traffic on intra-regional routes within Asia is also soaring, with demand jumping 9.9% in August. This compares with growth of just +1.5% on routes connecting Asia with Europe. Another region performing well is the Middle East, where rising capacity among the big Gulf carriers helped spur a 9.9% increase in demand in August.

By contrast, overall traffic on North American and European airlines rose just 1.5% and 2.7% respectively in August 2016, while domestic traffic in Russia declined 2.7%.

De Juniac noted that lower airfares, driven in part by falling oil prices, are helping to sustain global growth, while airline profitability is “stronger than ever”. He added however, that the aviation industry remains “vulnerable to many external factors beyond its control”.

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