• Monday, May 27, 2024
businessday logo


Demand for air travel picks up in August


Demand for air travel is on the rise as the International Air Transport Association (IATA) global passenger traffic results for August shows a slight pick-up in demand over the previous month.

Total Revenue Passenger Kilometers (RPKs) increased 5.9 percent compared to August 2013, which was above the 5.4 percent year-over-year increase recorded in July.

The data shows that August capacity climbed 5.5 percent while load factor stands at 83.9 percent which is a 0.3 percentage point rise over August 2013.

“August was a good month right across the industry. All regions reported an expansion in demand for air travel. And load factors were high, reflecting the fact that August is peak travel season in the Northern hemisphere. We should, however, keep an eye on potential downside risks. European travel, for example, continues to show robust growth.

“The 6.1 percent year-to-date expansion in demand reflects a solid step up from the 3.8 percent growth recorded in 2013. But it remains a question how long the robust trend in passenger travel can continue in light of the continent’s increasingly worrying economic outlook,” Tony Tyler, IATA’s director general, said.

The figures showed further that international passenger traffic rose 6.7 percent  in August, with all regions showing growth over the previous year while capacity also rose 6.7 percent and load factor was stable at 84.2 percent.

European carriers’ international traffic climbed 6.8 percent in August compared to the year-ago period. Carriers based in the region are experiencing strong demand despite the economic difficulties in the Eurozone.

Tyler noted that sanctions related to the Russia-Ukraine crisis are among the factors having a dampening effect on key European economies including Germany.

Capacity was up 6.0 percent pushing load factor to 86.9 percent which is 0.6 percentage points above previous-August levels.

African airlines’ demand rose 7.5 percent, while capacity climbed 5.9 percent and the load factor improved 1.1 percentage points to 75.0 percent.

Asia Pacific airlines saw their traffic rise 5.8 percent in August compared to the previous year. After a slow start, the Chinese economy has been stabilsing, supported by government fiscal stimulus, and regional trade activity which encourages business travel, has rebounded fully. Capacity rose 7.0 percent and load factor declined 0.9 percentage points to 81.0 percent.

North American airlines’ demand rose 3.2 percent in August compared to a year ago.

According to JP Morgan/Markit, overall business conditions in the US are the strongest they have been since May 2010. With capacity up 5.0 percent, load factor fell 1.5 percentage points to 86.6percent.

Middle East carriers had the strongest year-on-year traffic growth in August at 11.7 percent as airlines continue to benefit from the strength of regional economies and solid growth in business-related premium travel.

Capacity rose 10.3 percent and load factor rose 1.0 percentage points to 83.0 percent.

Latin American airlines experienced an 8.2 percent rise in traffic, second highest among the regions. Capacity rose 6.4 percent and load factor rose 1.4 percentage points to 82.2 percent.

While economies such as Colombia, Peru and Chile continue to expand robustly, growth in the Brazilian economy remains fundamentally weak and regional trade volumes have made no progress this year compared to the highs reached at the end of 2013.

Domestic demand rose 4.5 percent in August compared to August 2013 with all markets reporting growth, led by Russia and India. Domestic capacity climbed 3.4 percent and load factor rose 0.9 percentage points to 83.4 percent.

The continuing Ebola crisis, according to the report,  took on a new dimension with the first confirmed diagnosis of Ebola in the United States.

IATA however said it is closely coordinating with the World Health Organisation (WHO) adding that WHO evaluates the risk of Ebola transmission occurring on an aircraft as “very low.”

WHO also continues to oppose travel restrictions and border closures.

Sade Williams