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June 2019 IATA Air Passenger Market Analysis
RPK growth remains solid with new record high load factors
Highlights of the June 2019 Air Passenger Market Analysis
- Industry-wide revenue passenger kilometres (RPKs) grew by an even 5.0% over the 12 months to June, up slightly from the 4.7% pace observed last month.
- Industry-wide load factors continued to rise to new highs as capacity growth remained moderate, with ASKs increasing by 3.3% over the past year. The load factor of 84.4% was the highest recorded level for a June month.
- At a regional level, Africa and the Middle East had the strongest annual growth this month, with RPKs up 11.7% and 7.8% year-on-year, respectively. Apart from the Middle East, all regions set new record high monthly load factors.
- Russia has the strongest domestic market, with double-digit RPK growth for the 11th consecutive month. India’s domestic market has rebounded strongly following the disruption from the demise of Jet Airways earlier in the year.
Growth surges Africa
International RPK growth bounced back sharply this month for carriers in Africa. The year-on-year growth rate more than doubled this month, to a very strong 11.7%, the only region to achieve a double-digit rate of growth. The continent continues to benefit from a generally supportive economic backdrop – including improved stability in a number of countries – as well as increases in air transport connectivity.
Growth in global passenger volumes remains solid
Industry-wide revenue passenger kilometres (RPKs) increased by an even 5.0% over the year to June, up modestly from last month’s 4.7% year-on-year outcome. The current pace means that passenger volumes are growing a little slower than what we typically think of as the long-run average rate of growth (in the order of 5¼-5½%).
In seasonally-adjusted (SA) terms, the growth trend has shown tentative indications of an acceleration in the past two months.
Although this is a positive development, given the volatility in the monthly data and the downside risks to the global outlook, we would caution against placing too much reliance upon these early signs.
For the first half of the year in aggregate, RPKs are 4.7% higher than over the same period in 2018. A year ago the equivalent growth rate was 7.6%, highlighting the moderation in the growth trend that we have noted over recent months.
All regions contributed positively to the 1H19 growth rate, most notably Asia Pacific, Europe and to a lesser extent, North America. Having said that, the muchreduced contribution from the Asia Pacific region in 1H19 compared with 1H18 (around half that of last year) is striking.
Leading indicators remain firm overall…
Despite easing over the past 12 months or so, the
global Purchasing Managers Index (PMI) remains in
the region associated with expansion of output. The
PMI has proven to be an enduring leading indicator of
air passenger demand.
After falling below the level of growth suggested by the PMI, the improvement in RPK growth in recent months has broadly restored the relationship between the two variables, pointing to a similar pace of RPK growth in the near-term.
At the country-level, business conditions are more mixed, and generally more positive amongst the developed markets, with the main exceptions of the UK and Japan. In the former, ongoing Brexit uncertainty continues to dampen business sentiment...Download the full document here.