Bleak economy, terror attacks a drag on global air travel

Travel News 12 Aug 2016

Even though demand for air travel is on the rise worldwide, it is elevating at a slower pace than before due to headwinds from economic uncertainty, political factors and terror threats, according to the latest report by IATA.

Global passenger traffic in June rose by 5.2 per cent compared to the same period a year ago, and up slightly from the 4.8 per cent increase recorded in May.

However, the upward trend in seasonally-adjusted traffic has moderated since January. June capacity increased by 5.6 per cent and load factor slipped 0.3 percentage points to 80.7 per cent.

June international passenger demand rose 5 per cent compared to June 2015. All regions recorded growth, led by airlines in Latin America. Capacity climbed 6.4 per cent, causing load factor to slide 1.1 percentage points to 79.4 per cent.

Asia-Pacific airlines’ June traffic increased 8.2 per cent compared to the same period last year. However, most of the growth relates to the strong upward trend in traffic seen in the final months of 2015 and into 2016, with June demand barely higher than in February.

According to IATA, this could be a natural pause, but could also be a sign that Asian passengers are being put off travel by terrorism in Europe.

European carriers saw demand rise 2.1 per cent, the smallest increase among regions, reflecting the negative impact of recent terrorism. While demand tends to recover reasonably quickly after such events, the repeated nature of the attacks may have a more lasting impact.

Meanwhile, Middle Eastern carriers posted a 7.5 per cent traffic increase in June, which was well down on the double-digit growth recorded earlier in the year. In part this could be owing to the timing of Ramadan, which tends to depress traffic growth.

North American airlines’ demand rose 4 per cent compared to June a year ago, which was well up on the 0.5 per cent year-over-year growth recorded in May.