Highlights:
- Total revenue passenger kilometres (RPKs) for Feb-2018 rose +7.6% year-over-year and available seat kilometres (ASKs) increased +6.3% boosting month load factors 0.9 percentage point to +80.4%, a February record;
- The Feb-2018 passenger performance is supported by "robust economic backdrop and solid business confidence," says IATA;
- In domestic markets travel demand rose +8.2% in Feb-2018 - Australia hits 17-month high and India delivers 42nd consecutive month of double-digit growth;
- International passenger demand rose +7.2% in Feb-2018 compared to Feb-2017 with Latin America showing the largest month growth;
- Freight market shows strongest demand growth across Jan-Feb period since 2015 with +7.7% rise in freight tonne kilometres (FTKs).
According to IATA's latest monthly data, total revenue passenger kilometres (RPKs) for the month rose +7.6%, compared to Feb-2017, up from +4.6% year-over-year growth in January. Monthly capacity (available seat kilometres or ASKs) increased by +6.3%, and load factor rose 0.9 percentage point to +80.4%, surpassing the previous record for the month of 79.5%, which was set last year.
The slowdown in demand in Jan-2018 is described as "temporary" by IATA and was attributable to factors including the later timing of the Lunar New Year in 2018. The Feb-2018 performance is supported by "robust economic backdrop and solid business confidence," says IATA, but the industry association warns increases in fuel prices--and labour costs in some countries will likely "temper the amount of traffic stimulation from lower airfares this year".
Domestic Passenger Markets
In domestic markets IATA's data shows travel demand rose +8.2% in Feb-2018 compared to Feb-2017, up from +4.9% year-over-year growth in Jan-2018, with all major markets reporting increases, led by India and China. Domestic capacity climbed +7.0%, and load factor increased +0.9 percentage point to 82.3%.
In Australia domestic traffic rose +3.9% compared to the year-ago period, a 17-month high, while India's domestic traffic rose +22.9%, the 42nd consecutive month of double-digit year-on-year demand growth, and load factor exceeded 90% for the first time on record. The domestic Russia market was the only one to see a slowdown in year-over-year RPK growth, but this related more to developments a year earlier than its current performance, notes IATA.
International Passenger Markets
International passenger demand rose +7.2% in Feb-2018 compared to Feb-2017, which was up from the +4.2% increase recorded in January. Led by airlines in Latin America, all regions recorded better year-on-year growth compared to January's results. Total capacity climbed +5.9%, and load factor rose +1.0 percentage point to 79.3%.
- European carriers saw February demand increase by +6.8% compared to a year ago, a modest acceleration compared to a +6.0% increase in Jan-2018. Capacity rose +5.0% and load factor increased +1.4 percentage points to 82.2%, highest among regions.
- Asia-Pacific airlines' Feb-2018 traffic rose +9.1% compared to the year-ago period. Capacity increased +8.4% and load factor climbed +0.6 percentage point to 80.5%.
- Middle East carriers recorded a +3.4% demand increase in Feb-2018 compared to a year ago. Capacity rose +3.9% and load factor slipped -0.3 percentage point to 74.1%.
- North American airlines' traffic climbed +7.2% in Feb-2018. Capacity rose +4.6% and load factor was up +1.9 percentage points to 78.0%.
- Latin American airlines posted the fastest year-on-year growth for a second consecutive month as February traffic jumped +9.8% compared to Feb-2017, up from 8.1% growth in Jan-2018. Capacity increased by +8.9%, and load factor rose +0.6 percentage point to 81.5%.
- African airlines experienced a +6.3% rise in traffic for the month compared to the year-ago period. Capacity rose +3.3%, and load factor climbed +1.9 percentage points to 67.8%.
Freight Markets
In the cargo arena, latest results for Feb-2018 show a +6.8% increase in demand measured in freight tonne kilometres (FTKs) compared to the same period last year. Adjusting for the potential Lunar New Year distortions by combining growth in Jan- 2018 and Feb- 2018, demand increased by +7.7%, the strongest start to a year since 2015, says IATA. Freight capacity, measured in available freight tonne kilometres (AFTKs), grew by +5.6% year-on-year in Feb-2018 meaning demand growth outstripped capacity growth for the 19th month in a row, positive for airline yields and the industry's financial performance.
The continued growth in air cargo demand is consistent with ongoing robust global trade flows, but IATA again warns there are signs that "the best of the upturn for air freight has passed" with demand drivers for air cargo moving away from the "highly supportive levels seen last year". It notes that over recent months the Purchasing Managers Index (PMI) for manufacturing and export orders has softened in a number of key exporting nations and the seasonally adjusted demand for air cargo which rose at a double-digit annualised rate for much of 2017 is now trending at just +3%.
- Asia-Pacific airlines saw demand in freight volumes grow +6.5% in Feb-2018 and capacity increase by +7.2%, compared to the same period in 2017.
- North American airlines' freight volumes expanded +7.3% in Feb-2018 compared to the same period a year earlier, and capacity increased by +4.1%.
- European airlines posted a +5.7% increase in freight volumes in Feb-2018. This was almost half the rate of the previous month and the slowest of all regions. Capacity increased +3.8%.
- Middle Eastern carriers' year-on-year freight volumes increased +7.4% in Feb-2018 and capacity increased +7.6%.
- Latin American airlines experienced growth in demand of +8.7% in Feb-2018 and a capacity increase of +6.9%..
- African carriers' saw freight demand increase by +15.9% in Feb-2018 compared to the same month last year - the largest increase of any region. Capacity increased by +3.9%.