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April 2018 IATA Air Passenger Market Analysis
Solid growth in RPKs in April, with another record high load factor
The upward trend in RPKs remains robust
Year-on-year growth in industry-wide revenue passenger kilometres (RPKs) slowed to 6.2% in April, down from a 12-month high of 9.7% in March. The slowdown in the annual RPK growth rate was driven largely by developments a year ago – including the comparatively late timing of Easter in 2017 – rather than any notable change in the near-term traffic trend. In fact, while the opening months of the year are a comparatively quiet period for industry-wide passenger demand, the upward trend in seasonally adjusted (SA) RPKs has strengthened over the past three months or so.
Another year of above-trend growth forecast…
2018 remains on track to be another year of abovetrend growth for industry-wide RPKs. Nonetheless, as we have noted before, we forecast a moderate slowdown in demand growth in calendar-year 2018 from that seen during last year as a whole. This is partly because increases in airline input costs – notably fuel prices but also labor costs in some cases – mean that we expect to see a reduced boost to demand from lower airfares in 2018 than we have in recent years. While hedging practices differ throughout the industry, oil prices have rallied over recent months and are currently around 50% higher in US dollar terms than they were a year ago.
Strong upward trend in African passenger traffic
Annual growth in international RPKs flown by African airlines halved to 5.1% in April, from 11.2% in March, but remained slightly ahead of its five-year average pace (4.9%). As in the case for the other regions, the upward SA demand trend remains strong, helped by continuing signs of improvement in the region’s largest economies: business surveys in Nigeria and South Africa are both currently consistent with rising economic activity, which is just the fourth time this has been the case in the past 41 months.
Highlights of the April 2018 Air Passenger Market Analysis
- Industry-wide revenue passenger kilometres (RPKs) increased by 6.2% in year-on-year terms in April, while the industry-wide load factor posted yet another monthly record high (82.3% of available seat kilometres).
- 2018 is on track to be another year of above-trend RPK growth. However, reduced stimulus from lower airfares and a moderate slowdown in economic growth ahead of the summer passenger peak, are both expected to see RPK growth slow slightly in calendar-year 2018 relative to that seen last year.
- Domestic India RPKs posted double-digit annual growth for the 44 th month in a row, while airlines based in Asia Pacific topped the international RPK growth chart for the first time since December. Download the full document here.