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Strong Passenger Demand Resumes Record Load Factor in February

(MENAFNEditorial) 5 April 2018 United Arab Emirates: The International Air Transport Association (IATA) announced global passenger traffic results for February showing a rebound in traffic growth following the slower demand experienced in January, which was owing to temporary factors including the later timing of the Lunar New Year in 2018.

Total revenue passenger kilometers (RPKs) for the month rose 7.6%, compared to February 2017, up from 4.6% year-over-year growth in January.

Monthly capacity (available seat kilometers or ASKs) increased by 6.3%, and load factor rose 0.9 percentage point to 80.4%, surpassing the previous record for the month of 79.5%, which was set in February 2017.

'As expected, we saw a return to stronger demand growth in February, after the temporary slowdown in January.

This is being supported by the robust economic backdrop and solid business confidence.

However, increases in fuel prices--and labor costs in some countries--likely will temper the amount of traffic stimulation from lower airfares this year, said Alexandre de Juniac, IATA's Director General and CEO.

Air passenger market detail - February 2018


February 2018 (%year-on-year) Share1 RPK ASK PLF(%pt)2 PLF(level)3 Total Market 100.0% 7.6% 6.3% 0.9% 80.4% Africa 2.2% 2.1% 0.2% 1.3% 68.8% Asia Pacific 33.7% 10.1% 9.3% 0.6% 82.1 Europe 26.5% 7.0% 4.9% 1.6% 81.6 Latin America 5.2% 7.2% 6.1% 0.9% 81.4% Middle East 9.5% 3.7% 3.9% -0.2% 74.0% North America 23.0% 6.5% 5.0% 1.1% 80.6% 1% ofindustry RPKs in 2017 2 Year-on-year change in load factor 3Load factor Level

International Passenger Markets


February 2018 (%year-on-year) Share1 RPK ASK PLF(%pt)2 PLF(level)3 International 63.8% 7.2% 5.9% 1.0% 79.3% Africa 1.9% 6.3% 3.3% 1.9% 67.8% Asia Pacific 18.5% 9.1% 8.4% 0.6% 80.5% Europe 23.7% 6.8% 5.0% 1.4% 82.2% Latin America 2.8% 9.8% 8.9% 0.6% 81.5% Middle East 9.1% 3.4% 3.9% -0.3% 74.1% North America 7.8% 7.2% 4.6% 1.9% 78.0%

February international passenger demand rose 7.2% compared to February 2017, which was up from the 4.2% increase recorded in January.

Led by airlines in Latin America, all regions recorded better year-on-year growth compared to January's results. Total capacity climbed 5.9%, and load factor rose 1.0 percentage point to 79.3%.

  • European carriers saw February demand increase by 6.8% compared to a year ago, a modest acceleration compared to a 6.0% increase in January. Passenger volumes are trending upwards at a double-digit annualized rate alongside supportive economic conditions in the region. Capacity rose 5.0% and load factor increased 1.4 percentage points to 82.2%, highest among regions.
  • Asia-Pacific airlines' February traffic rose 9.1% compared to the year-ago period. Demand is being supported by healthy regional economic growth and expansion in the number of routes on offer. Capacity increased 8.4% and load factor climbed 0.6 percentage point to 80.5%.
  • Middle East carriers recorded a 3.4% demand increase in February compared to a year ago. Capacity rose 3.9% and load factor slipped 0.3 percentage point to 74.1%. Carriers in the region faced significant headwinds over the past year including the temporary ban on large portable electronic devices as well as the proposed travel bans to the US from some countries in the region.
  • North American airlines' traffic climbed 7.2% in February, supported by the relatively vigorous US economic backdrop, while the weaker dollar appears to be offsetting some of the negative impacts on inbound travel. Capacity rose 4.6% and load factor was up 1.9 percentage points to 78.0%.
  • Latin American airlines posted the fastest year-on-year growth for a second consecutive month as February traffic jumped 9.8% compared to February 2017, up from 8.1% growth in January. Demand continues to recover from the impacts of the severe 2017 hurricane season. Capacity increased by 8.9%, and load factor rose 0.6 percentage point to 81.5%.
  • African airlines experienced a 6.3% rise in traffic for the month compared to the year-ago period. The growth occurred amid an improving regional economic backdrop. Business confidence in Nigeria has risen sharply over the past 15 months while a reduction in political uncertainty in South Africa has contributed to an improvement in business confidence there for the first time in more than a year. Capacity rose 3.3%, and load factor climbed 1.9 percentage points to 67.8%.

Domestic Passenger Markets

World February 2018 (%year-on-year) Share1 RPK ASK PLF(%pt)2 PLF(level)3 Domestic 36.2% 8.2% 7.0% 0.9% 82.3% Dom. Australia4 0.9% 3.9% 0.5% 2.6% 77.3% Domestic Brazil4 1.2% 4.5% 3.4% 0.8% 80.1% Dom. China P. R.4 9.1% 11.8% 13.1% -0.9% 85.3% Domestic India4 1.4% 22.9% 17.7% 3.9% 90.7% Domestic Japan4 1.1% 5.8% 2.1% 2.5% 71.8% Dom. Russian Fed.4 1.4% 6.6% 1.3% 3.8% 77.9% Domestic US4 14.5% 6.2% 5.2% 0.7% 81.9% 1% ofindustry RPKs in 2017 2Year-on-year change load in factor 3Load factor Level 4NOTE: The seven domestic passenger markets for which broken-down data are available account for 30% of global RPKs and approximately 82% of total domestic RPKs

Domestic travel demand rose 8.2% in February compared to February 2017, up from 4.9% year-over-year growth in January, with all markets reporting increases, led by India and China. Domestic capacity climbed 7.0%, and load factor increased 0.9 percentage point to 82.3%.

  • India's domestic traffic rose 22.9%, the 42nd consecutive month of double-digit year-on-year demand growth, and load factor exceeded 90% for the first time on record. Passenger demand continues to be stimulated by network growth that translates into time savings for air travelers.
  • Australian domestic traffic rose 3.9% compared to the year-ago period, which was a 17-month high.

The Bottom Line

'All around the globe we see the same positive picture of growth in demand for aviation connectivity.

Aviation is the business of freedom, enabling people to lead better lives.

Aviation has helped to lift millions from poverty, but for aviation to deliver even greater benefits in future, adequate, affordable infrastructure is a must.

'A case in point is the Latin American region, where aviation already supports jobs for 5 million people and $170 billion in GDP.

The potential for aviation to do far more exists, but without concerted action by governments to address capacity shortfalls, the region could face an infrastructure crisis in the future.

Within the region, Mexico City is the most critical of the bottlenecks.

The current airport was designed for 32 million passengers annually but serves 47 million.

The solution is a new airport which is already under construction.

But its future has been politicized in the current presidential election.

The vital need for the new airport needs to be understood by all, said de Juniac.


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