By Stephanie Jacob
Global passenger traffic growth in November 2015 remained strong above the 10-year average of 5.6%, said the International Air Transport Association (IATA). Total revenue passenger kilometers (RPKs) for the month rose 5.9% year-on-year (y-o-y).
Total RPK (a measure of actual passenger traffic) in November was lower than the 7.1% seen in October 2015. However this was due to the impact of factors like the cessation of operations by Transaero, Russia’s second largest carrier, and labor strikes at Lufthansa, and IATA believes that the impact of these issues will be short-lived.
IATA said it continued to see healthy demand despite some softening in economic growth, largely due to falling fares, as data for the first 10 months of 2015 indicated a 5% decline in average fares.
November’s global capacity in terms of available seat kilometers (ASK) increased by 4.2% while load factor rose by 1.3 percentage points to 78%. Available seat kilometers measures available passenger capacity, while load factor is the percentage of ASKs used.
“Consumers continue to benefit from lower fares, which are spurring demand. The economy benefits from the stimulus to consumer spending. And airlines are starting to achieve minimum acceptable profit levels. It’s good news all around, but as we open 2016, economic risks are mounting,” said Tony Tyler, IATA’s director general and chief executive officer (CEO).
In Asia-Pacific, airlines’ November traffic rose 7.9% y-o-y. While capacity increased 5.7% and load factor rose to 76.2% y-o-y. IATA said: “Weakness in emerging Asia trade activity, as well as slower than expected growth in China, appear not to be impacting international RPKs for Asia-Pacific carriers.”
Looking ahead, Tyler said: “The airline industry is delivering solid financial and operational performance. The industry’s return on capital for 2015 and 2016 is expected to exceed its cost of capital – a very rare occurrence. This means we are on the path toward financial sustainability. Consumers are benefitting from lower fares, and airlines are able to invest in new aircraft that are more comfortable, quieter and more environmentally friendly.
Passenger demand remains strong; however, the ongoing turmoil in the global financial markets and concerns over slowing economic growth in China are casting a shadow over the New Year.”
He also noted that 2016 would see countries come together at the 39th International Civil Aviation Organization Assembly to try and formulate a measure with which to achieve carbon neutral growth from 2020.
Tyler said: “2016 will be a historic year for aviation as states (countries) come together at the 39th International Civil Aviation Organization Assembly to discuss – and I hope agree – a market-based-measure that will allow airlines to achieve carbon-neutral growth from 2020.”
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