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Monday, 09 July, 2018, 10 : 30 AM [IST]

Despite slow increase in air passenger traffic, India records 45th consecutive month of double-digit growth in May

Domestic air traffic in India rose 16.6% year-over-year in May, which was down from 25.7% in April. Passenger volumes in India have fallen back in seasonally-adjusted terms in recent months alongside some mixed signals on the economic front. Notwithstanding this, May was India’s 45th consecutive month of double-digit annual RPK (revenue passenger kilometers) growth. Demand continues to be supported by strong growth in the number of airport connections within the country: some 22% more airport-pairs are scheduled to operate in 2018 compared to last year, the International Air Transport Association (IATA) said.

According to IATA, globally, demand rose 6.1% compared to the same month in 2017, which was a slight pickup from 6.0% year-over-year growth for April 2018. Capacity climbed 5.9% and load factor rose 0.1 percentage point to 80.1%. Domestic demand rose 6.6% in May compared to May 2017, led by growth in China and India. This was down from the 8.6% year-on-year growth recorded in April largely owing to moderate growth in both countries, although each continued to post double-digit traffic gains.

“May was another solid month in terms of demand growth. As had been expected, we saw some moderation, as rising airline costs are reducing the stimulus from lower airfares. In particular, jet fuel prices are expected to be up nearly 26% this year compared to 2017. Nevertheless, the record load factor for the month signifies that demand for air connectivity is strong,” said Alexandre de Juniac, Director General and CEO, IATA.

During May, airlines in Asia-Pacific saw their traffic rise 8.0% compared to the year-ago period, slightly down on an 8.1% increase in April. Capacity increased 7.6%, and load factor edged up 0.3 percentages point to 77.9%. Passenger traffic has continued to trend strongly upwards in seasonally-adjusted terms, buoyed by a combination of robust regional economic growth and increases in the number of route options for travellers.

“Last month, IATA released its mid-year economic report showing expectations of an industry net profit of USD 33.8 billion. This is a solid performance. But our buffer against shocks is just USD 7.76. That’s the average profit per passenger that airlines will make this year—a narrow 4.1% net margin. And there are storm clouds on the horizon, including rising cost inputs, growing protectionist sentiment and the risk of trade wars, as well as geopolitical tensions. Aviation is the business of freedom, liberating people to lead better lives. Governments that recognise this will take steps to ensure aviation is economically sustainable. And aviation works best when borders are open to trade and people,” said de Juniac.
 
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