The International Air Transport Association (IATA) announced global passenger traffic results for September showing demand growth of 5.3% (measured in revenue passenger kilometers or RPKs) over September 2013. This continues the positive growth trend for passenger demand even though the performance was slightly below the August year-over-year rise of 6.3%. September capacity rose 5.1% and load factor rose 0.2 percentage points to 80.3%.

“Overall, demand for passenger travel is growing in line with expectations. We saw, however, some shifting of the sources of that growth in September, largely driven by economic factors. The strengthening of the US and Asian economies was offset by weakness in Europe and Latin America,” said Tony Tyler, IATA’s Director General and CEO.

“The three big stories in September were Europe, Russia and India,” said Tyler.

• European airlines reported 3.9% growth for international demand. That’s a significant drop from the 7.0% reported in August indicating the impact of the Air France crew strike and a general weakening of European economic prospects.
• Year-on-year growth for Russian domestic demand fell to 5.6% in September from 10.1% in August. The impact of price stimulus wore-off and the weakness revealed could be a first indicator of the economic impact of the Russia-Ukraine crisis.
• Indian domestic travel spiked with a 26.3% growth in September (several times the 7.6% growth recorded in August) as a result of price stimulation.

International Passenger Markets

September international passenger demand rose by 5.3% compared to the same month in 2013. This was exceeded by a capacity expansion of 5.7% which resulted in a softening of the load factor to 80.5%, down 0.2 percentage points from the year-ago period.

• Asia Pacific airlines reported September demand growth of 4.8% compared to a year-ago. Although this is a weaker rise than August, the recent trend has been positive and reflects better demand conditions in the region, including stronger trade activity that encourages business travel, Capacity climbed 7.2% and load factor dropped 1.7 percentage points to 76.2%.
• European carriers recorded growth of 3.9% in September compared to a year ago, a significant slowdown on the August rise of 7.0%. Along with the impact of the 14-day Air France crew strike, this also reflects a lapse in the Eurozone economic recovery. Indicators show a weakening in key economies including Germany, owing to the Russia-Ukraine crisis and related sanctions, as well as a reversal in prior improvements in consumer confidence. With capacity up just 2.6%, load factor was 84.7%, the highest for any region and a 1 percentage point rise compared to last year.
• North American airlines saw international demand rise by just 2.1%. However, underlying trends in business activity are positive and growth in trade volumes has accelerated, boding well for business-related international travel. Capacity rose 3.8% and load factor slipped 1.4 percentage points to 82.4%.
• Middle East carriers once again recorded the strongest increase in international air travel, with a rise of 15.8% in September compared to a year ago. Airlines here continue to benefit from the strength of regional economies as well as expansion in export orders that support international business activity and business-related premium travel. Capacity rose 14.9% and load factor climbed 0.6 percentage points to 78%.
• Latin American airlines posted growth of 4.6% in September year-on-year, which was a notable slowdown on August (8.3%). Growth in the Brazilian economy remains fundamentally weak and recent indicators of growth and business activity are showing signs of further weakness, but regional trade volumes have been improving. With capacity up 4.9% compared to a year ago, load factor slipped 0.2 percentage points to 79.9%.
• African airlines experienced a 1.8% rise in international RPKs in September compared to a year ago, down significantly from August year-over-year growth of 7%. The deceleration in growth rates cannot be immediately interpreted as a trend change as significant volatility in volumes exists for this region. The effect of any Ebola-related traffic downturn is mostly restricted to Guinea, Liberia and Sierra Leone, but these markets comprise a very small proportion of overall African traffic. Adverse economic developments in some parts of the continent are responsible for the weakness in international air travel for regional carriers. However, South Africa has managed to avoid entering a recession, which could help moderate downward pressure on air travel. Capacity rose 2.6% and load factor fell 0.6 percentage points to 70.5%, the lowest among all regions.

Domestic Passenger Markets

Demand on domestic routes rose by 5.3% in September over the year-ago period, while capacity climbed 4.0%, pushing load factor up 1 percentage point to 80%. The strongest growth was recorded in India (26.3%) and China (8.6%).

• Indian domestic traffic spiked 26.3% in September compared to a year ago. Whereas previous improvements in growth rates potentially were attributable to revived confidence over the new business-supportive government, the strong increase in September was owing to market stimulation measures introduced by carriers.
• Domestic RPKs in Russia rose 5.6% in September, a considerable deceleration compared to the August increase of 10.1% (which was largely supported by price stimulus). This may be the first sign of an economic slowdown owing to the Russia-Ukraine crisis and ensuing EU sanctions.

CARGO

The International Air Transport Association (IATA) released data for global air freight markets showing an acceleration of demand in September. Measured by freight tonne kilometers (FTKs), volumes rose 5.2% compared to September last year, which is 0.8 percentage points ahead of the 4.4% average growth in demand reported for the year-to-date. Capacity grew by 3.8%.

Although the overall growth rate continues the positive trend of recent months, regional variations are significant. Airlines in Asia-Pacific, North America, Middle East and Africa all posted strong growth figures (between 5% and 17% above previous year levels). European airlines, however, saw a decline of 1.6% compared to September 2013 and Latin American airlines reported little difference from 2013 with just 0.3% growth.

“There were mixed messages in September’s freight performance. The solid 5.7% growth for Asia Pacific airlines is a particularly positive sign given their 40% market share. But the 1.6% decline in demand for European airlines is a worrying trend that reflects the general uncertainty in the European economy amplified by sanctions resulting from the Ukraine-Russia conflict. Overall, improvements in global business confidence have stagnated—which could mean a bumpy road ahead for air cargo,” said Tony Tyler, IATA’s Director General and CEO.

Regional Analysis in Depth

Asia-Pacific carriers reported growth of 5.7% compared to September 2013. The region is benefitting from a rebound in trade activity after a slowdown in Q1. The release of the iPhone 6 also increased freight shipments from China. Capacity increased 5.6%.

European airlines saw air freight volumes fall 1.6%. This follows several months of persistent weakness as the Eurozone economies slow down, and the impact of sanctions on Russia continues. The Air France strike also impacted on volumes. Capacity grew by 1.2%.

North American carriers reported an increase in cargo FTKs of 5.4%. Latest data for business activity is positive, pointing to continuing growth in the months ahead and regional trade growth has accelerated. Capacity fell 0.2%, which helped support load factors which remain significantly below the global average (36.0% compared to 45.5%).

Middle Eastern carriers grew cargo volumes by 17.0%, a particularly strong result when compared with their average growth in demand for the year-to-date of 10.1%. Capacity expanded 14.5%.

Latin American airlines reported growth of just 0.3%. However, the data for trade and exports is positive, so there is a good chance that air freight volumes will pick up in coming months. Capacity climbed 1.7%.

African airlines saw air cargo expand by 11.5%. Regional trade volumes are still volatile, but there are signs that key economies, like South Africa, are showing signs of better performance compared to earlier this year. Capacity fell 1.3%.

View September freight results (pdf)