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July 2017 IATA Air Passenger Market Analysis
Robust July RPK growth, but the upward trend in traffic has eased

Robust passenger growth in the July peak period…
Industry-wide revenue passenger kilometres (RPKs) grew by 6.8% year-on-year in July, down from 7.7% in the previous month. The strong finish for seasonally-adjusted (SA) traffic last year is continuing to provide a favorable comparison for annual RPK growth rates. Indeed, July’s year-on-year growth rate was just ahead of the five-year average pace (6.4%).

…but the upward trend in SA traffic has eased

That said, the July data further underlined the extent to which the upward trend in SA passenger traffic has eased from that at the end of last year. Industry-wide RPKs were growing at an annualized rate of more than 12% coming into 2017, but this has since slowed to 6% over the past three months.

Business confidence has stopped improving…

The moderation in the upward trend for SA passenger volumes has come alongside a softening in demand drivers from the exceptionally supportive conditions seen in late-2016.

This partly relates to a pause in the upward trend in global business confidence; having risen strongly between September 2016 and January 2017, the global composite purchasing managers’ index – a confidence measure that is highly correlated with industry-wide RPK growth – has broadly tracked sideways since January. To be clear, the indicator remains consistent with rising economic activity as well as robust year-on-year RPK growth in the region of 6-6.5%. However, recent developments in the indicator appear to rule out an acceleration in annual RPK growth anytime soon.

Highlights of the July 2017 Air Passenger Market Analysis

  • Global revenue passenger kilometres grew by a robust 6.8% year-on-year in July – the first summer peak month.
  • Passenger demand remains on course to grow solidly in 2017 as a whole. However, with stimulus from lower airfares waning, the exceptionally supportive demand backdrop has moderated.
  • The industry-wide passenger load factor posted an all-time high for the month of July (84.7%).
  • China tops the domestic chart for just the 2nd time in 28 months, but the upward trend in India has picked up. Download the full document here. 

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