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March 2017 IATA Air Passenger Market Analysis
A robust first quarter of 2017 for air passenger demand

A robust first quarter of 2017 for pax growth
Global revenue passenger kilometres (RPKs) grew by 6.8% year-on-year in March. This was a moderate slowdown in growth relative to February once you allow for the distortion to the data last month owing to the extra day in February 2016. (We estimate that the ‘underlying’ February RPK year-on-year growth rate was slightly more than 8%, compared to the ‘unadjusted’ 4.9% figure.)

Nonetheless, the March data completed a robust first quarter of 2017 for passenger demand growth: industry-wide RPKs were 7.0% higher than in the same period a year ago, and around 8.1% higher adjusting for the leap year effect. This is well ahead of the long-run average RPK growth rate of around 5.5%.

Broad support for passenger demand…
The robust start to 2017 has been supported by a combination of lower yields and airfares, and a broadbased upturn in global economic conditions, which has helped to drive demand for passenger travel. Air travel has continued to become cheaper relative to the price of other goods and services; the price of air travel has fallen by around 10% in real terms over the past year.

…but are demand drivers becoming more mixed?
That said, having been unequivocally supportive over the past 6-9 months, there are some signs that the drivers of demand are becoming more mixed. Certainly month-to-month developments in RPKs were more mixed in SA terms during the first quarter of 2017 than the consistent upward trend seen during Q4 2016. 

Highlights of the March 2017 Air Passenger Market Analysis

  • Global revenue passenger kilometres (RPKs) grew by 6.8% year-on-year in March. 
  • RPKs grew by more than 8% in annual terms in Q1 2017 adjusting for the leap year, supported by lower airfares and an upturn in economic activity. But there are tentative signs of such drivers becoming more mixed. 
  • China overtakes India as the fastest growing domestic market, as Latin American carriers post the fastest international growth. 
  • The seasonally adjusted (SA) load factor remained steady in March, close to its record high. 
    Download the full document here. 

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