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May 2017 IATA Air Passenger Market Analysis
Passenger demand growth slows in May, but remains robust

Slower growth in May, but a robust start to 2017
Slower growth in May, but a robust start to 2017 Having reached a six-year high of 10.9% in April, year-on- year growth in global RPKs slowed to (a still robust) 7.7% in May.

Industry-wide RPKs have now grown by 7.9% year-onyear so far this year compared to the same period in 2016. This is equivalent to annual growth of around 8.6% once you allow for the extra day in 2016 on account of it having been a leap year.

Moderation in SA trend from a stellar end to 2016

The upward trend in SA traffic has moderated from the double-digit annualized pace that we saw at the end of 2016 and into this year. Indeed, whereas industry-wide RPKs were growing at an annualized rate of more than 12% coming into 2017, this pace has fallen to around 8% over the past three months or so.

It is worth putting this moderation in perspective; after all, the current pace of growth is still very strong, well ahead of both the five-year and ten-year average rates, for example (6.4% and 5.5%, respectively).

Equally, however, the exceptionally supportive conditions for passenger demand that were a feature of the second half of last year have softened. This relates to two factors: first, the recent rise in business confidence has paused; having risen for five consecutive months starting in September 2016, the services purchasing managers’ index – a key measure of business confidence that is strongly linked with passenger growth – has tracked sideways since January.          

Highlights of the May 2017 Air Passenger Market Analysis

  • Year-on-year growth in global revenue passenger kilometres (RPKs) slowed to 7.7% in May, but stayed robust.
  • The stronger global economic backdrop, as well as stimulus from lower airfares, has continued to drive passenger growth. However, the exceptionally supportive backdrop that we saw in H2 2016 has softened.
  • A mixed month for international RPK growth, as India regains its position at the top of the domestic growth chart.
  • The seasonally adjusted (SA) industry-wide load factor remains close to an all-time high.
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