Solid international passenger growth was the best of a bad set of performance metrics revealed by IATA for Apr-2019 as the industry continued to struggle in the fast-changing operational landscape. International passenger demand rose +5.1% year-on-year. All regions recorded traffic increases, led by airlines in Europe. Total capacity climbed +3.8%, and load factor climbed 1.1ppts to 82.5%.
The European airline performance was its strongest in 2019 with traffic increasing +8.0%, up from +4.9% in Mar-2019, but the timing of the Easter holidays would have impacted that monthly uplift. On a seasonally adjusted basis, IATA analysis shows that RPKs have risen only +1% since Nov-2018, suggesting the global economic and trade backdrop, along with the uncertainty surrounding Brexit, is impacting demand. Capacity rose +6.6% and load factor surged 1.1ppts to 85.7%, the highest among the regions.
The domestic passenger market performance in Apr-2019 was dominated by the news that RPKs within India declined -0.5% year-on-year. This is the first negative growth rate in the country's domestic market in more than five years and is largely due to the demise of Jet Airways. Overall, domestic travel demand climbed +2.8% during the month, down from +4.1% year-on-year growth in Mar-2019. Capacity increased +3.2%, and load factor slip 0.3 percentage point to 83.2%.
India had a big impact on these levels, but domestic China continues to see dampened demand too. Traffic may have increased +3.4% in Apr-2019, up from 2.8% in Mar-2019, but it remains still well below the 2016-2018 period when growth averaged around 12%, reflecting the impact of the US-China trade dispute and softening in a number of economic indicators. Australia also recorded a decline in domestic demand in Apr-2019 (down -0.7%).
In the cargo sector IATA forecasts "continued weakness" with the air freight volumes trend in 2019 "clearly downwards". It reported global FTKs decreased -4.7% year-on-year in Apr-2019, continuing the negative trend in demand that commenced in Jan-2019. AFTKs increased 2.6% in Apr-2019, marking the 12th consecutive month in which capacity outgrew demand.
Air cargo volumes have been volatile in 2019, due to the timing of Chinese New Year and Easter, but volumes are generally around -3% below the Aug- 2018 peak. "Brexit-related trade uncertainty in Europe and trade tensions between the US and China, have contributed to declining new export orders," explains IATA, which also notes export orders have increased in month-on-month terms only three times in the last 15 months and orders have indicated negative export demand since Sep-2018.
"2019 is expected to be the 10th consecutive year of airline profits, but rising costs, trade wars and other uncertainties are likely to have an impact on the bottom line. The prolonged grounding of the 737 MAX aircraft is taking its toll. And aviation, like all industries, is under intensified scrutiny for its impact on climate change," says Mr de Juniac, making for a packed agenda for the IATA AGM in Seoul.