Airline passenger demand down in August due to security concerns

Passenger demand fell to 4.6% in August, compared to a 6.4% rise in July, according to the International Air Transport Association (IATA), which represents about 265 airlines comprising of 83% of global traffic.

August’s capacity of available seats increased by 5.8% and the load factor slipped slightly, by 0.9 percentage points to 83.8%.

Alexandre de Juniac, IATA’s director general and chief executive, said a dip in passenger demand was “disappointing compared to the previous month’s performance” but was “still healthy growth… although terrorist attacks in Europe have dampened demand, the impact is ebbing."

Nonetheless, in August international passenger demand rose 4.7, compared to August 2015, with all regions recording increases, but was dominated by airlines in the Middle East with capacity rose 6.5% resulting in the load factor to fall 1.4 percentage points to 83.9%.

Middle Eastern carriers reported a 10.3% increase, while capacity climbed 13.7%, resulting in a 2.5 percentage point fall in load factor to 81.2%.

For European airlines, they saw demand rise 3.3% year-on-year but were affected by security concerns, but the IATA said there are indications that this may be easing as capacity increased 5.1%, which caused load factor to drop 1.6 percentage points to 86.6%, the highest among all the regions.

De Juniac said lower airfares are a major factor sustaining demand for air travel and airline profitability is stronger as a result of better industry structure and efficiency gains.

“But the lingering impact of terrorist attacks in Europe earlier in the year reminds us that the aviation industry is vulnerable to many external factors beyond its control. The risks — including the normal ups and downs of the business cycle — won’t go away.

“The industry has improved resilience along with its profitability. That will be critical to responding quickly should the business environment change".

Asia-Pacific airlines’ August traffic rose 5.6% as capacity increased by 6.8% and load factor slipped down 0.9 percentage points to 81.9%.

IATA said there are signs of Asian travellers being put-off by recent terrorism incidents in Europe as traffic on Europe-Asia routes grew only 1.5% in July, while international traffic growth on routes within Asia increased to 9.9%.

For North American airlines, international demand rose 1.8% and seasonally-adjusted traffic increased at a rate of 7% since March. Capacity rose 3.8%, causing load factor to drop 1.7 percentage points to 85.3%.

Latin American airlines had a 6.7% demand rise compared to the same month last year, helped by strong demand on international routes within the region, partly due to the summer Olympics in Brazil.

African airlines’ traffic rose 1.8% in August with international growth tracking sideways since the start of the year due to challenges in the major economies.

For domestic travel, demand rose 4.3% in August compared to August 2015 with a 4.4% increase in capacity and the load factor slid 0.1 percentage points to 83.6%.

All domestic markets reported increases in passenger demand apart from Brazil and Russia, while India and China reported double-digit rises.