IATA: January 2018 passenger traffic show lowest growth in 4 years

After three years of some serious growth, the International Air Transport Association (IATA), has revealed global passenger traffic (revenue passenger kilometres or RPKs) results for January 2018. Which, rose just 4.6 percent compared to the same time last year, the slowest year-over-year increase since 2015

But, IATA are not figuring this to be a be the start of a downward trend in passenger traffic, far from it – the association predicts the exact opposite with passenger numbers expected to approach double of what they are now, by 2035.

Instead, IATA believes the statistics to be a blip brought on temporary factors including the later timing of the Lunar New Year in 2018 as well as less favourable comparisons with the strong upward trend in traffic seen in late 2016-early 2017.

IATA estimates the impact of the later Lunar New Year-related travel period holiday represented around two-fifths of the slowdown in year-over-year growth for the month. January capacity (available seat kilometres or ASKs) rose 5.3 percent, and load factor slipped half a percentage point to 79.6 percent.

“Despite the slower start, economic momentum is supporting rising passenger demand in 2018. That said, concerns over a possible trade war involving the US could have a serious dampening effect on global market confidence, spilling over into demand for air travel,” said Alexandre de Juniac, IATA’s director general and CEO.

• China’s domestic traffic rose 6.6 percent in January, which was a slowdown compared to 14.1 percent year-over-year growth in December. With the Lunar New Year falling in February, that month is expected to see a big jump in annual traffic growth.
• Russian domestic traffic grew 7.9 percent compared to January 2017. Traffic is being supported by strong economic conditions, helped by higher oil prices.

International Passenger Markets

International passenger demand growth slowed to 4.4 percent in January, from 6.1 percent in December, with all regions recording growth, led by Latin America and Europe. Capacity rose 5.3 percent and load factor dipped 0.7 percentage point to 79.6 percent.

• Asia-Pacific carriers recorded a demand increase of 4.6 percent compared to January 2017, which was a 46-month low. This largely was owing to the impact of the later Lunar New Year, which fell in mid-February this year. Capacity rose 6.1 percent, and load factor dropped 1.2 percentage points to 80.4 percent.
• European carriers’ international traffic climbed 6.0 percent in January compared to the year-ago period, up from 5.8 percent growth in December 2017. The region was the only one to see an acceleration in traffic compared to the prior month. This is being supported by the buoyant economic conditions in the region. Capacity rose 5.0 percent and load factor was up 0.7 percentage point to 80.8 percent.
• Middle East carriers had the weakest growth, with demand up just 0.5 percent compared to January 2017, the slowest pace since September 2008. The market to/from North America has been especially hard hit owing to factors 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. Capacity climbed 4.6 percent and load factor fell 3.1 percentage points to 76.8 percent.
• North American airlines experienced a 3.5 percent rise in traffic over a year ago, but capacity rose 4.3 percent and load factor dipped 0.7 percentage point compared to a year ago to 79.6 percent. The relatively healthy economic backdrop in the region is helping support outbound demand but this is being partly offset by a negative impact on inbound traffic to the US.
• Latin American airlines’ traffic climbed 7.3 percent in January compared to January 2017, strongest among the regions. Capacity rose 8.2 percent, however, and load factor slipped 0.7 percentage point to 82.6 percent, which still was the highest among the regions. Stronger economic conditions in Europe are helping support rising demand on the market between Europe and South America in particular.
• African airlines saw January traffic rise 4.9 percent against a mixed backdrop for the region’s largest economies. In Nigeria, business confidence has risen sharply while in South Africa, political uncertainly continues to inflict an economic toll. The region’s capacity rose 4.2 percent, and load factor edged up 0.5 percentage point to 70.3 percent.

Domestic Passenger Markets 

Domestic traffic climbed 5.1 percent in January year-on-year, down from 7 percent growth recorded in December. The slowdown is entirely attributable to the later Lunar New Year holiday period in 2018. All markets showed growth, led by India, which experienced its 41st consecutive month of double-digit traffic increases. Domestic capacity increased 5.3 percent and load factor slid 0.2 percentage point to 79.8 percent.

The Bottom Line

“Aviation is the business of freedom. It liberates us from the constraints of geography, distance and time, enabling us to lead better lives; and it makes the world a better place. For the business of freedom to grow the benefits it generates, we need borders that are open to trade and travel, and infrastructure to support the demand for connectivity. Governments have the main role to play in these areas by preserving the benefits of global commerce and ensuring adequate airport and airspace capacity to cope with an expected doubling of demand by 2036,” said de Juniac.

Read the full report here.