Global passenger traffic in May 2016 demand up 4.6% from 2015

Tony Tyler, IATA’s director general and CEO
Tony Tyler, IATA’s director general and CEO

The International Air Transport Association (IATA) has announced its global passenger traffic results for May, showing that demand (measured in revenue passenger kilometers, or RPKs) rose 4.6%, compared to the same month in 2015, which was the same level achieved in April.

Capacity climbed 5.5%, which pushed the average load factor down 0.7 percentage points to 78.7%. Demand for domestic traffic rose 5.1%, outpacing international demand growth of 4.3%.

Tony Tyler, IATA’s director general and CEO, said: “After a very strong start to the year, demand growth is slipping back toward more historic levels. A combination of factors are likely behind this more moderated pace of demand growth. These include continuing terrorist activity and the fragile state of the global economy. Neither bode well for travel demand.”

International Passenger Markets

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Annual growth in international RPKs slowed for the third consecutive month, to 4.3%, from 5% recorded in April year-over-year. Airlines in all regions recorded growth. Total capacity climbed 6.1%, causing load factor to slip 1.3 percentage points to 77.1%.

Asia-Pacific airlines’ traffic rose 5.1% in May compared to the year-ago period. Capacity increased 6.4%, which caused load factor to slide 1.0 percentage point to 75.1%. Strong upward momentum has stalled in recent months.

European carriers’ May demand climbed just 2.1% over May 2015, reflecting continuing fallout from the Brussels terror attack. Capacity rose 3.5% and load factor dipped 1.1 percentage points to 80.6%, which was the highest.

Middle East carriers had an 11.8% rise in demand in May compared to a year ago, which was the largest increase among regions. Capacity increased 15.6%, however, and load factor dropped 2.4 percentage points to 71.9%. Growth in capacity has now exceeded traffic growth in 18 of the past 20 months.

North American airlines’ traffic climbed 0.5% as carriers continue to focus on the larger and stronger domestic markets. Capacity rose 1.9% and load factor fell 1.1 percentage points to 80.1%.

Latin American airlines experienced a 5.1% increase in traffic in May compared to the same month last year. As with Europe, upward momentum has stalled. Capacity climbed 5.2% and load factor was flat at 80.2%.

African airlines’ traffic rose 9.5%, continuing the trend of strong growth that is linked to the expansion of long-haul networks by the region’s carriers, particularly Ethiopian Airlines. Capacity rose 10.4%, and load factor slipped 0.5 percentage points to 64.5%.

Domestic Passenger Markets

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Domestic demand rose 5.1% in May compared to May 2015, which was up from the 4% year-on-year growth recorded in April. Brazil, Russia and Japan all showed declines. Domestic capacity climbed 4.4%, and load factor rose 0.5 percentage points to 81.7%.

US domestic traffic climbed 4.4% in May. Having gone through a soft patch over the past six months in line with softening indicators of business confidence, demand appears to have resumed its upward trend.

Brazil’s traffic continued to contract in May, falling 7.7% compared to a year ago, amidst continuing political and economic turmoil. It is down more than 10% in seasonally-adjusted terms since early 2015.

Conclusion

Tyler concluded: “The shockwaves of the Brexit vote have extended worldwide and the fallout will affect the air transport industry, from both economic and regulatory perspectives. Aviation plays a vital role in supporting economic growth and development.

“As the post-Brexit regulatory framework is negotiated between the EU and the UK it is critical that there are no steps backward for aviation connectivity.”

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