Demand Growth Strengthens in November; November Peak Season Air Freight Demand Up 8.8%

- Geneva, Switzerland.

The International Air Transport Association (IATA) announced global passenger traffic results for November 2017 showing continued robust demand. Total revenue passenger kilometers (RPKs) rose 8.0% compared to November 2016, the fastest growth rate in five months and up from a 7.3% year-over-year rise in October. Capacity (available seat kilometers or ASKs) increased by 6.3%, and load factor rose 1.2 percentage points to 80.2%.

"The airline industry is in a good place entering 2018. November’s strong demand gives the industry momentum. The number of unique city-pair connections now tops 20,000. Passengers not only have more travel choices than ever, the cost of travel in real terms has never been cheaper. Along with delivering great value to consumers, airlines are rewarding their shareholders with normal levels of profitability. We expect 2018 to be the fourth year in a row where the industry’s return on invested capital will exceed the cost of capital. In sum, we begin the New Year with confidence," said Alexandre de Juniac, IATA’s Director General and CEO.

"Challenges, however, remain. Security threats continue. Infrastructure issues persist. Fees and charges are a growing part of the cost base. And in many cases airports and air traffic management struggle to keep pace with demand and technology advancements. These and other challenges can only be addressed in partnership with governments. And doing so requires governments to recognize the enormous value that aviation—the business of freedom—provides to their economies and the world," said de Juniac.     

November 2017
(% year-on-year)

World share¹

RPK

ASK

PLF
(%-pt)²         

PLF
(level)³  
        

Total Market

100.0%

8.0%

6.3%

1.2%      

80.2%

Africa

2.2%

5.6%

2.0%

2.3%

69.4%

Asia Pacific

32.9%      

11.3%

9.0%

1.6%

80.6%

Europe

26.4%

7.9%

5.8%

1.6%

81.5%

Latin America

5.2%

5.8%

4.7%      

0.9%

82.4%

Middle East

9.6%

4.8%

4.4%      

0.3%

70.2%

North America

23.8%      

5.4%      

4.6%

0.6%

83.5%

   ¹% of industry RPKs in 2016   ²Year-on-year change in load factor   ³Load factor level   

International Passenger Markets

November international passenger demand rose 8.1% compared to the year earlier period, an increase from 7.3% in October. All regions showed growth, led for the third consecutive month by carriers in the Asia-Pacific region. Total capacity climbed 6.6%, and load factor increased 1.1 percentage points to 78.2%.

  • Asia-Pacific airlines’ November traffic climbed 10.8% compared to the year-ago period, driven by strong regional economic growth and continuing expansion of options for travelers. Capacity increased 8.7% and load factor rose 1.5 percentage points to 78.6%.
  • European carriers saw demand increase by 7.9% in November 2017. Economic conditions in the region remain very favorable, with business confidence recently having risen to its strongest level in seven years. Capacity climbed 6.2% and load factor rose 1.3 percentage points to 81.9%, which was tied with Latin America as the highest load factor among the regions.
  • Middle East carriers had a 4.9% demand increase, which was the lowest among the regions. The market segment to and from North America continues to be affected by the now-lifted ban on personal electronic devices, as well as a wider impact stemming from the proposed travel restrictions to the US from certain countries. Capacity rose 4.3% and load factor lifted 0.4 percentage point to 70.1%.
  • North American airlines’ traffic climbed 6.4%, in November. Capacity rose 6.1% and load factor edged up 0.2 percentage point to 79.1%. The relatively vigorous economic backdrop is supporting outbound passenger demand, but this appears partly to be offset by a negative impact on inbound travel to the US from the additional security measures involved with traveling there.
  • Latin American airlines’ November traffic climbed 7.2% compared to November 2016. This was broadly in line with the region’s five-year average growth rate, although on a seasonally-adjusted basis, volumes are still below the peak level reached in July 2017. Capacity also increased by 7.2%, keeping load factor flat at 81.9%.
  • African airlines experienced a 7.9% rise in demand compared to November 2016. Volumes have started to trend upwards strongly again in seasonally-adjusted terms in recent months, in line with an improvement in business confidence in key economies including Kenya and Nigeria. Indicators in South Africa, by contrast, are still consistent with falling economic activity. Capacity rose 3.7% and load factor climbed 2.7 percentage points to 68.3%.

Domestic Passenger Markets             

Domestic travel demand rose 7.8% in November 2017 compared to the same month in 2016, up from a 7.2% year-over-year increase in October. All markets showed growth, led again by India and China. Domestic capacity climbed 5.9%, and load factor improved 1.4 percentage points to 83.6%.     
     

November 2017
(% year-on-year)       

World share¹

RPK

ASK

PLF     
(%-pt)²     

PLF
(level)³  

Domestic

36.4%     

7.8%

5.9%    

1.4%      

83.6% 

Australia

1.0%

3.3%

-0.5%

3.0%

82.0%

Brazil 

1.2%

6.2%

3.6%

2.0%

82.9%

China P.R             

8.7%

14.1%

12.9%       

0.9%

82.9%             

India             

1.3%

16.4%

10.4%

4.6%

89.3%

Japan             

1.1%

6.7%

0.7%             

4.3%

77.5%

Russian Fed.             

1.3%

7.6%         

0.9% 

4.9%           

79.0%

US

15.0%

4.9%      

3.9%

0.8%

85.8%

¹% of industry RPKs in 2016   ²Year-on-year change in load factor   ³Load factor level  *Note: the seven domestic passenger markets for which broken-down data are available account for 30% of global total RPKs and approximately 82% of total domestic RPKs       

  • India’s domestic traffic rose 16.4% in November, marking the 39th consecutive month of double-digit domestic growth.
  • Australia’s domestic traffic rose 3.3% in November, compared to November 2016, which was a 14-month high. This has occurred against a backdrop of tightening capacity, which dropped 0.5% in November.

View full November passenger traffic analysis 

 

Geneva – The International Air Transport Association (IATA) released data for global air freight markets showing that demand, measured in freight tonne kilometers (FTKs), climbed 8.8% in November 2017 compared to the year-earlier period. This was an increase from the 5.8% annual growth recorded in October 2017. Despite indicators pointing to air cargo having passed a cyclical growth peak, demand remains strong.

Freight capacity, measured in available freight tonne kilometers (AFTKs), rose by 4.0% year-on-year in November. This was the 16th consecutive month in which demand growth outstripped capacity growth, which is positive for industry load factors, yields, and financial performance.

The uptick in freight growth coincides with the traditional period of strong demand seen in the fourth quarter. November’s robust performance puts the air cargo industry on track to achieve its strongest operational and financial performance since the post-global financial crisis rebound in 2010. The Purchasing Managers Index (PMI) for manufacturing and export orders, which has tracked sideways for much of 2017, reached a seven-year high in the fourth quarter signifying that growth is carrying momentum into 2018.

"Air freight demand remains robust. November showed 8.8% year-on-year growth, keeping up the momentum that will make 2017 the strongest year for air cargo since 2010. And there are several indicators that 2018 will be a good year as well. In particular, buoyant consumer confidence, the growth of international e-commerce and the broad-based global economic upturn are cause for optimism as we head into the New Year," said Alexandre de Juniac, IATA’s Director General and CEO.        

November 2017
(% year-on-year)

World share¹

FTK

AFTK

FLF     
(%-pt)²     

FLF
(level)³

Total Market        

100.0%     

8.8%

4.0%    

2.2%      

49.1% 

Africa

1.6%

17.5%

24.0%

-1.4%

25.9%

Asia Pacific

37.4%

8.1%

1.2%

3.8%         

60.1%

Europe             

23.6%             

9.9%

4.7%       

2.4%         

50.0%             

Latin America             

2.8%

9.4%

11.1%

-0.6%

36.6%

Middle East             

13.9%

6.6%

3.1%

1.6%

49.2%

North America            

20.8%

9.6%

3.9%

2.1%

40.3%

¹% of industry FTKs in 2016   ²Year-on-year change in load factor   ³Load factor level              

Regional Performance    

Airlines in all regions reported an increase in total year-on-year demand in November.

  • Asia-Pacific airlines saw freight volumes increase by 8.1% and capacity expand by 1.2% in November, compared to the same period last year. The region’s manufacturers continue to enjoy buoyant export order books. And the major exporters in China and Japan are reporting rising demand supported in part by a pick-up in economic activity in Europe and a continued solid performance from the US. This is expected to support demand into the New Year.
  • North American carriers posted an increase in freight volumes of 9.6% for November. Capacity increased 3.9%. The strength of the US economy and the US dollar have improved the inbound freight market in recent years. Data from the US Census Bureau shows an 11.6% year-on-year increase in air imports to the US in the first ten months of 2017, compared to a slower rise in exports of 6.7%. The recently agreed US tax reform bill may also help to support freight volumes in the period ahead.
  • European airlines posted a 9.9% increase in freight demand in November and a capacity increase of 4.7%. Concerns that the recent strengthening of the euro might have affected the region’s exporters have not materialized. Europe’s manufacturers’ export orders are growing at their fastest pace on record. This is expected to support demand into the New Year.
  • Middle Eastern carriers’ year-on-year freight volumes increased 6.6% in November and capacity increased 3.1%. During the same period carriers in the region posted 6.6% growth in international freight volumes - the slowest regional year-on-year growth for the second time in three months. However, seasonally-adjusted international freight volumes have continued to trend upwards at a rate of 8-10% over the past six months. Notably, freight load factors have increased substantially on routes to and from the Middle East to North America, indicating a fall in capacity flown on the route.
  • Latin American airlines experienced a growth in demand of 9.4% in November and a capacity increase of 11.1% compared to the same period in 2016. International freight volumes rose by 9.6% over the same period. This is well ahead of the five-year average growth rate of 0.9%. The pick-up in demand comes alongside signs of economic recovery in the region’s largest economy, Brazil. Seasonally-adjusted international freight volumes are now back to the levels seen at the end of 2014.
  • African carriers posted the largest year-on-year increase in demand of all regions in November, with freight volumes rising 17.5%. Capacity increased 24%. During the same period international freight volumes grew by 17.8%, a deceleration from 27.2% in October. However, this still was the 13th month of double-digit increases. Demand has been boosted by very strong growth in Africa-Asia trade which increased by more than 67% in the first ten months of the year.

View November air freight results (pdf)

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