News & Industry Affairs/IATA news

August 2018 IATA Air Passenger Market Analysis
Load factor hits all-time high, alongside solid peak-season growth

Highlights of the August 2018 Air Passenger Market Analysis

  • Industry-wide revenue passenger kilometres (RPKs) grew by a solid 6.4% year-on-year in August – underlining previous signs of solid growth in passenger traffic during the peak season over the northern hemisphere summer.
  • The industry-wide load factor posted its highest ever level since our time series began in 1990 (85.3%). As was the case last month, European airlines led the way (88.7%), followed by North American carriers (86.5%).
  • Domestic India RPKs posted their 48th consecutive month of double-digit annual growth in August. Meanwhile, Asia Pacific carriers topped the international RPK growth chart for the second time in five months. 

African airlines post second fastest growth rate in August
African airlines posted the second fastest growth rate in August (6.8%). While this was a slight deceleration from July, the bigger picture is that the upward SA demand trend remains strong, with annual RPK growth ahead of its five-year average (4.9%). This comes despite an increasingly challenging economic backdrop in the continent’s largest economies, with South Africa re-entering recession in Q2 and a moderation in business confidence in Nigeria in recent months.

Further evidence of a solid peak travel season…
Year-on-year growth in industry-wide revenue passenger kilometres (RPKs) increased to 6.4% in August, up from 6.1% in July. The August data provide further evidence of solid growth in RPKs during the peak period of passenger demand over the northern hemisphere summer. Passenger volumes have now risen by 6.8% over the first eight months of the year relative to the same period last year – broadly in line with the five-year average growth rate (6.9%). RPKs are currently trending upwards at a similar pace in seasonally adjusted (SA) terms. As we have noted before, recent developments underline our view that 2018 will be another year of above-trend growth for industry-wide RPKs.

…but key drivers have become less supportive

That said, the pace of growth seen this year to date remains below that seen in the same period of 2017 (7.9%). This supports our existing view that RPK growth, while remaining robust, will slow moderately in calendar-year 2018 relative to 2017. This partly reflects higher input costs for airlines translating into a reduced boost to demand from lower airfares than we have seen in recent years. Jet fuel prices are currently around 30% higher than they were a year ago, and airlines have also seen upward pressure on labor costs in a number of cases. Meanwhile, although economic activity in parts of the world remain very strong – notably the US – business surveys currently paint a more mixed picture than they did during the best of the broad-based upturn in economic activity late last year. Download the full document here. 

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