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September 2018 IATA Air Passenger Market Analysis
Weather effects at play in September, but upward trend slowed in Q3

Highlights of the September 2018 Air Passenger Market Analysis

  • Annual growth in industry-wide revenue passenger kilometres (RPKs) slowed to an eight-month low of 5.5% in September. The outcome was affected in part by weather impacts, although the upward traffic trend slowed in Q3.
  • The industry-wide load factor fell in annual terms for the first time in eight months in September. Nonetheless, airlines based in Europe, Asia Pacific, and Africa all managed to post record-high passenger loads for the month.
  • Domestic India RPKs posted their 49th consecutive month of double-digit annual growth, while Latin American and African airlines posted the fastest international RPK growth rates.

African airlines growth in top two for fouth month in a row
Year-on-year RPK growth of 6.0% in September was enough to keep African airlines in the top two for the fourth month in a row. While such growth was a slight deceleration from August, the bigger picture is that the upward SA demand trend remains strong, and annual RPK growth is still ahead of its five-year average (4.9%). As we have noted before, this is set alongside an increasingly challenging economic backdrop for the continent’s largest economies, with South Africa reentering recession in Q2 and a moderation in business confidence in Nigeria in recent months.

Weather effects distorted growth in September…
Annual growth in industry-wide revenue passenger kilometres (RPKs) slowed to an eight-month low of 5.5% in September, down from 6.4% in August. The slowdown in year-on-year RPK growth from the previous month in part reflects the disruptive impact of hurricane and typhoon activity during September, particulalry Typhoon Jebi in Japan, which caused the complete closure of Kansai airport for a number of days. All told, we estimate weather-related disruption to have reduced year-on-year industry-wide RPK growth by around 0.1-0.2 percentage point in September. Allowing for the impact of this disruption, year-on-year RPK growth in September was broadly in line with its ten-year average pace (5.7%). To be clear, this is still a solid pace. Nonetheless, it is somehat slower than the growth rates we have become accustomed to in recent years, and below the pace that RPKs have grown by so far this year to date (6.7%). 

……alongside signs that the SA trend slowed in Q3

In fact, it is important to note that the upward trend in seasonally adjusted (SA) RPKs has moderated over the course of the third quarter. This is perhaps the clearest indication yet of the extent to which we are seeing a reduced boost to demand from lower airfares than we have seen in recent years. Moreover, the moderation in the upward RPK trend has continued to come alongside a more mixed picture on the economic backdrop too. This is being driven by a range of factors, including heightened uncertainty about trade policies, geopolitical tensions in parts of the world and region-specific issues such as Brexit. Download the full document here. 

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