Abu Dhabi, UAEThursday 17 October 2019

Passenger demand picks up in August but remains below long term trend, IATA says

Trade wars, uncertainty over Brexit continue to be a drag for aviation sector

Trade wars, uncertainty over Brexit continue to impact demand, IATA says. Bloomberg
Trade wars, uncertainty over Brexit continue to impact demand, IATA says. Bloomberg

The International Air Transport Association (IATA) on Thursday said global passenger demand picked up in August by 3.8 per cent year-on-year, but growth remains below the long term trend due to an economic slowdown in key markets, with uncertainty over Brexit and the trade war between the US and China denting confidence.

In the Middle East, demand was even lower than the global trend at 2.9 per cent in August, although this was higher than the 1.7 per cent growth achieved in July. The region serves as a key hub connecting European and Asian markets.

“While this was better than the average of the past twelve months, it remains far below the double-digit growth trend of recent years,” IATA said in a statement.

“Falling business confidence in parts of the region, combined with some key airlines going through a process of structural change and geopolitical tensions are all likely to be contributing factors.”

Alexandre de Juniac, IATA’s director-general and chief executive, said global demand figures were "well-down on the roughly 8.5 per cent annual growth seen over the 2016 to first quarter of 2018 period”.

However, he added that airlines are doing a great job of matching capacity to demand.

“With passenger load factors reaching a new high of 85.7 per cent, this is good for overall efficiency and passengers’ individual carbon footprint,” Mr de Juniac said.

For Asia-Pacific airlines, August passenger traffic increased 3.5 per cent year-on-year but remains well below the long-term average growth rate of around 6.5 per cent, reflecting slowing economic growth in India and Australia as well as the impact of trade disputes, according to IATA.

European carriers saw August demand climb 3.7 per cent year-on-year, fractionally up over a 3.6 per cent increase for July. In North America, passenger demand rose 2.5 per cent compared to August last year.

Latin American airlines experienced a 2.3 per cent demand increase in August compared to the same month last year but down from a 4 per cent annual growth in July. Argentina’s financial and currency crises, combined with challenging economic conditions in Brazil and Mexico, contributed to the depressed performance, according to IATA.

In Africa, airline passenger traffic climbed 4.1 per cent in August, up from 3.2 per cent in July, after South Africa — the region’s second largest economy — returned to positive economic growth in the second quarter of 2019.

Updated: October 10, 2019 07:49 PM

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