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Tuesday, 17 July, 2018, 14 : 16 PM [IST]

Despite slow increase in passenger traffic, India records 45th consecutive month of double-digit growth in May 2018: IATA

According to IATA, India registered double-digit domestic air passenger growth for the 45th straight month in May 2018 even though volumes have fallen in recent month. 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.

“Passenger demand has continued to be supported by strong growth in the number of airport connections within the country too; 22 per cent more airport-pairs are scheduled to operate in 2018 compared to last year,” IATA said.

While industry-wide RPK increased marginally to 6.1 per cent in May, the grouping said growth this year is expected to slow slightly due to reduced stimulus from lower airfares and a more mixed economic backdrop.

Still, IATA said it expects 2018 to be another year of above-trend passenger growth

Carriers based in Asia Pacific once again posted the fastest international RPK growth rate, the grouping said, adding that it estimates that India and China account for around three-quarters of the slowdown in overall domestic RPK growth between May and April.

Alexandre de Juniac ,Director General and CEO, IATA said 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,” he added.

International Passenger Markets
International passenger traffic demand rose 5.8%, which was up from 4.6% growth in April. All regions recorded growth, led by Asia- Pacific airlines. Total capacity climbed 5.4%, with load factor rising 0.3 percentage point to 78.7%.

  • Asia-Pacific airlines saw their traffic rise 8.0% in May 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 percentage 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.
  • European carriers’ May demand climbed 6.2% over May 2017, well above the 3.4% year-over-year growth recorded in April. Capacity rose 5.1% and load factor was up 0.8 percentage point to 83.5%, which was the highest among regions. Despite the impact of strikes in the region and mixed signals regarding the economic backdrop, traffic growth is healthy.
  • Middle East carriers’ May demand growth slowed to 0.8% compared to a year ago, from 2.9% annual growth recorded in April. The earlier timing of Ramadan this year may have affected the result, but more broadly, the upward trend in traffic has slowed compared to last year. May capacity increased 3.7%, and load factor fell 1.9 percentage points to 67.5%.
  • North American airlines’ traffic rose 4.9% in May compared to May 2017, a strong rebound from 0.9% annual growth in April (which was a 36-month low). Capacity climbed 3.4% and load factor increased 1.2 percentage points to 82.0%. Given the comparatively strong US domestic economy, April’s weak demand performance likely was more reflective of unfavourable year-to-year comparisons with April 2017, when the current upsurge in growth began.
  • Latin American airlines experienced a 7.5% increase in traffic in May compared to the same month last year, which was up from 6.5% growth in April. Capacity climbed 7.0% and load factor rose 0.4 percentage points to 81.6%. Economic disruption in Brazil may be contributing to a slight slowdown in demand growth in recent months, but this is not expected to have a long-term impact on the healthy traffic trend.
  • African airlines’ traffic rose 3.8% in May compared to the yearago period, which was an 8-month low. Capacity rose 3.2% and load factor edged up 0.4 percentage point to 66.4%. The region’s two largest economies, Nigeria and South Africa, may be moving in opposite directions again, with higher oil prices bolstering the Nigerian economy, while business confidence in South Africa has weakened again.




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.

IATA represents nearly 290 airlines that account for around 82 per cent of global air traffic.

 
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