Airline capacity growth outpaces demand

Airline capacity growth outpaces demand

Airline association Iata reported a slowdown in passenger demand growth in January, with capacity increases outpacing demand in all regions of the world except Europe and Africa.

Iata recorded a 4.6% rise in traffic year on year in the month, but noted this was “the slowest increase in four years”.

The traffic increase lagged a 5.3% increase in global airline capacity in January.

Demand for international flights grew slightly slower at 4.4%, down from 6.1% in December, with all regions bar Europe and Latin America seeing growth below this level.

Iata attributed the slowdown in part to “temporary factors”, and particularly to “the late timing of the Lunar New Year” – suggesting the resulting shift in a major holiday period in China accounted for 40% of the slowdown.

Europe’s international traffic rose 6% year on year in the month, making it the only region to see a month-on-month increase in demand (from 5.8% in December) and outpacing capacity growth of 5%.

By contrast, North American airlines saw a 3.5% increase in traffic but a 4.3% rise in capacity.

Carriers in the Asia-Pacific region recorded a 4.6% increase in demand – the lowest in almost four years – but a 6.1% increase in capacity.

Middle East carriers showed the weakest growth, with demand up just 0.5% on a year earlier – the lowest since the financial turmoil of September 2008 – while capacity increased by 4.6%, producing a fall in average load factor of more than three percentage points.

Latin American airlines enjoyed the highest growth in demand, up 7.3% year on year in January. But capacity growth outpaced demand even here, rising 8.2%.

However, African carriers saw passenger growth of 4.9% which narrowly outpaced a capacity increase of 4.2%.

Looking forward, Iata director general and chief executive Alexandre de Juniac warned: “Concerns over a possible trade war involving the US could have a serious dampening effect on global market confidence, spilling over into demand for air travel.”

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