Pax are back as global growth hits a seven-month high
By Steve Creedy Sun Nov 6, 2016
Passengers appear to be back and filling more seats after a strong 7 per cent rise in September global traffic offered airlines a respite from a previously weakening trend.
The above-average rise was the strongest figure in seven months and outpaced a 6.6 per cent increase capacity to marginally push up the passenger load factor to 81.1 per cent.
New International Air Transport Association figures showed particularly robust growth of 8.6 per cent in the Asia-Pacific, where airlines have been lamenting the effects of tough competition and a weak global economy.
However, the association said there were still signs of Asian travellers being put off by terrorism threats.
IATA is predicting 2016 will be a good year for the industry, despite signs the profit cycle may have peaked. It forecast in June that global airline profits would hit $US39.4 million this year, up from a restated $35.3 million the year before.
"September’s growth in passenger demand was healthy,’’ said IATA director general Alexandre de Juniac. “Importantly, this rebound from August weakness suggests that travel demand is showing its resilience in the aftermath of terror attacks.
“We must, of course, be ever-alert to the ongoing terror threat. And overall the industry is still vulnerable to being buffeted by rising geopolitical tensions, protectionist political agendas, and weak economic fundamentals.’’
A regional breakdown of the figures shows Middle eastern carriers continued to top the league with an 11.5 per cent rise in demand. But the 73.2 per cent load factor for the region’s carriers was the second lowest and dropped in September due to a 13.8 percent rise in capacity as more new planes arrived.
IATA said demand growth of 5.2 per cent in Europe appeared to be returning to normal after a year of terrorism and political uncertainty.
A 7.1 per cent rise in Latin America was aided by growth on international routes while an 8 per cent growth in Africa reflected “favourable year-ago comparisons’’.
The North American market registered the smallest increase at 3.3 per cent.
Domestic demand climbed 7.2 per cent in September compared to a year ago, up from 4.1 per cent in August.
The association said India and China continued to experience double-digit annual traffic increases but described results elsewhere as “decidedly mixed’’.
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