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November 2018 IATA Air Passenger Market Analysis
Another month of solid RPK growth, but the trend has moderated


Highlights of the November 2018 Air Passenger Market Analysis

  • Industry-wide revenue passenger kilometres (RPKs) grew by 6.2% in November. The upward traffic trend has moderated over the past six months alongside signs that the pace of global economic expansion is slowing. 
  • The industry-wide load factor fell in annual terms in November, for just the third month in two years. Passenger capacity has continued to trend upwards at a faster annualized rate than demand. 
  • Russia topped the domestic growth chart for the first time since April 2017 while domestic India posted its 51 st consecutive month of double-digit annual growth. European airlines posted the fastest int’l RPK growth rate again.

African airlines passenger growth remains strong
Carriers based in Africa posted rates of year-on-year international RPK growth in November, at 5.8% and 5.7%, respectively. Despite ongoing challenges in the economic backdrops of Africa’s largest economies, the upward trend in regional passenger demand remains strong. At 5.7% in November, annual international RPK growth remains higher than its five-year average (4.8%).


Solid, but moderating, RPK growth in November
Industry-wide revenue passenger kilometres (RPKs) grew by 6.2% year-on-year in November – a slight deceleration from 6.3% in the previous month. The result is just ahead of the average RPK growth rate seen over the past decade (6.0%). However, it is some way below its five-year average (7.1%) and also lower than the growth rate this year to date (6.6%).

All told, the seasonally adjusted (SA) upward trend in RPKs has moderated over the second half of 2018. Passenger volumes have risen at a 6% annualized pace over the past six months – down from closer to 9% earlier in the year.


Economic backdrop has become less supportive

The recent moderation in industry-wide RPK growth has come alongside ongoing signs that the pace of global economic expansion is slowing. Indeed, the global composite Purchasing Managers’ Index (PMI) – a business survey that has proven to be a very good leading indicator of RPK growth in the past – recently fell to its lowest level in 28 months. Admittedly, the indicator remains consistent with industry-wide RPK growth remaining at or around its current pace into 2019. But equally, based on past experience, it suggests that a sharp pick-up in annual RPK growth is unlikely anytime soon. 

As we have noted before, the moderation in passenger volume growth has also partly reflected an ongoing reduced boost to demand from lower airfares than what we have seen in recent years. The manner in which these two drivers combine will be a key determinant to how fast passenger volumes will grow in 2019. Download the full document here. 

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