The International Air Transport Association (IATA) announced global passenger traffic results for September showing that demand (measured in revenue passenger kilometers, or RPKs) rose 5.7% compared to the same month in 2016. This was the slowest year-on-year increase since February. Hurricanes Irma and Maria weighed heavily on the results, although growth already had been tapering. Capacity climbed 5.3% and load factor edged up 0.3 percentage points to 81.6%, which was a record for the month of September.

"September’s growth in passenger demand was healthy, notwithstanding the heavy impacts of extreme weather events on the Americas," said Alexandre de Juniac, IATA’s Director General and CEO. "Global economic conditions support rising passenger demand, but with higher cost inputs, the demand stimulation from lower fares has waned, suggesting a moderating trend in traffic growth."     

   ¹% of industry RPKs in 2016   ²Year-on-year change in load factor   ³Load factor level   

International Passenger Markets

International RPKs climbed 6.5% with airlines in all regions recording growth compared to 2016. Total capacity climbed 5.6%, and load factor rose 0.7 percentage points to 81.3%.

• Asia-Pacific airlines’ traffic rose 8.7% in September compared to the year-ago period, the strongest growth among regions. Capacity increased 7.8%, and load factor climbed 0.6 percentage points to 78.3%. A solid regional economic backdrop, helped by robust growth in China, is supporting passenger demand within the region.
• European carriers saw September demand rise 7.1% over September 2016, in line with August growth of 7.0%. The upward trend in seasonally-adjusted demand has slowed considerably since May, but business confidence remains high and the economic backdrop is supportive. Capacity rose 5.2% and load factor surged 1.6 percentage points to 86.8%, which was the highest among regions.
• Middle East carriers had a 3.7% rise in demand, the slowest rate of increase since February 2009. The Middle East-US market has been hit hard by the now lifted cabin ban on large portable electronic devices, as well as the various proposed travel bans to the US. Traffic between the region and the US has fallen for six consecutive months through August (the most recent month for which route data are available). Capacity rose 4.3%, and load factor slipped 0.4 percentage points to 74.5%.
• North American airlines experienced a 3.0% rise in demand in September. Capacity rose 3.6% and load factor fell 0.5 percentage points to 81.0%. In addition to the impacts of hurricanes Irma and Maria, anecdotal evidence continues to suggest that inbound traffic to the US is being deterred by additional security measures now involved in traveling to the country.
• Latin American airlines’ performance also was affected by hurricane activity but strong underlying demand meant that traffic rose 8.5% compared to the same month last year. Capacity climbed at the same rate and load factor was flat at 82.2%, the second highest among regions.       
• African airlines posted a 3.6% rise in traffic in September, down from 6.5% in August. Capacity rose 0.3% and load factor jumped 2.4 percentage points to 73.8%. Conditions in the region’s two largest economies—Nigeria and South Africa, are diverging again, with business confidence levels in South Africa consistent with falling output.

Domestic Passenger Markets

Domestic demand climbed 4.2% in September compared to September 2016, heavily affected by weather disruptions in the US market, which accounts for more than 40% of all domestic RPKs. India and China continued to lead all markets with double-digit annual traffic increases while elsewhere, results were mixed. Capacity rose 4.7% and load factor slipped 0.4 percentage points to 82.2%.

¹% of industry RPKs in 2016   ²Year-on-year change in load factor   ³Load factor level  *Note: the seven domestic passenger markets for which broken-down data are available account for 30% of global total RPKs and approximately 82% of total domestic RPKs                              

• US domestic traffic fell 1.2%, reflecting the hurricane impacts. With operations at affected major airports having returned to normal, it appears the disruption will be short-lived.
• Japan’s domestic traffic also took a weather-related hit as Typhoon Talim caused a significant slowing of traffic growth from the 8.8% recorded in August to 3.6% in September. As with the US, the impact is expected to be temporary.

The Bottom Line

De Juniac expressed the aviation industry’s solidarity with the victims of the hurricanes, and emphasized the importance of aviation’s ability to deliver aid and support. "Our hearts go out to all those affected by the recent extreme weather events, which uprooted lives and communities and dealt heavy blows to local economies in the affected areas. It is at times like these that we truly see the vital role that aviation plays in disaster relief, bringing in much needed first responders and aid workers, as well as supplies, food and medicines to those in need," said de Juniac.     

View September passenger traffic results (pdf) 

FREIGHT 

The International Air Transport Association (IATA) released data for global air freight markets in September 2017 showing that demand (measured in freight tonne kilometers or FTKs), rose 9.2% compared to the same month in 2016. This was the slowest pace of growth seen in five months. However, it was still significantly higher than the five-year average growth rate of 4.4%. 

Freight capacity (measured in available freight tonne kilometers or AFTKs), rose by 3.9% compared to September of last year —less than half the pace of demand growth. This is positive for industry load factors, yields, and financial performance.

It appears that the industry has passed a cyclical growth peak. The upward trend in seasonally-adjusted freight volumes in Q3 has eased and the inventory-to-sales ratio in the US is now trending sideways. This indicates that the period when companies look to restock inventories quickly—which often gives air cargo a boost—has ended.

"Demand for air cargo grew by 9.2% in September. While that’s slower than in previous months, it remains stronger than anything we have seen in recent memory. But there are signs that this demand spurt may have peaked. So it becomes even more important to reinforce the industry’s competitiveness by accelerating the modernization of its many antiquated processes," said Alexandre de Juniac, IATA’s Director General and CEO.

With year-to-date demand growth of 10.1%, the IATA forecast of 7.5% growth in air freight demand for 2017 appears to have significant upside potential even if the peak of the economic cycle has passed.  

¹% of industry FTKs in 2016   ²Year-on-year change in load factor   ³Load factor level              

Regional Performance    

Airlines in all regions reported an increase in year-on-year demand in September.

• Asia-Pacific airlines saw freight volumes increase by 9.3% in September 2017, compared to the same period last year. Capacity in the region expanded 5.3%.  Demand growth was strong on all the major routes to, from and within Asia-Pacific, consistent with strong export order books for the region’s manufacturers. Exporters in Chinese Taipei, China and Japan all reported growing order books.
• North American carriers posted an increase in freight volumes of 7.4% for the month; the region also posted the second fastest international growth rate among regions (11.0%). Capacity increased 1.4%. The strength of the US dollar boosted the inbound freight market in recent years. Data from the US Census Bureau shows a 12.0% increase in air imports to the US in the first seven months of 2017, compared to a slower rise in export orders of 6.6%. However, there are signs that the decline in the US dollar since the start of the year is beginning to rebalance trade flows. In August 2017, the most recent month for which data are available, exports from the US by air grew 12.7% while imports by air grew more slowly at 7.4%.
• European airlines posted a 10.3% increase in freight demand in September 2017, and a capacity increase of 5.6%. Concerns that the recent strengthening of the euro might have affected the region’s exporters have not materialized. In fact, German manufacturers’ export orders are growing at their fastest pace in more than seven years. Freight demand is strongest on the routes to and from Asia - which have received a boost in trade from the economic stimulus measures put in place by China - and across the Atlantic.
• Middle Eastern carriers’ year-on-year freight volumes increased 8.9% in September 2017 and capacity increased 2.6%. This was a slowdown in demand from the previous month. A short-lived weak patch in demand in Q3 2016 has meant that recent months have produced volatility in the year-on-year growth rate. Seasonally-adjusted international freight volumes, however, have continued to trend upwards at a rate of 8% over the past six months. Still, strong competition, particularly on the Asia-Europe route, means that Middle East carriers are not seeing as healthy a pickup in the seasonally-adjusted traffic trend as carriers in other regions.  
• Latin American airlines experienced a growth in demand of 7.6% in September 2017 and capacity increased by 5.9% compared to the same period in 2016. International freight volumes rose by 8.6% over the same period. This is well above the five-year average rate of 0.1%. The pick-up in demand reflects signs of economic recovery in the region’s largest economy, Brazil. Seasonally-adjusted international freight volumes are now back to the levels seen at the end of 2014.
• African carriers posted the largest year-on-year increase in demand of all regions in September 2017, with freight volumes rising 17.7%. This is a slowdown from August but still more than twice the five-year average growth pace of 8.9%. Capacity increased by 2.6% over the same time period. Demand has been boosted by very strong growth on the trade lane to and from Asia which increased by more than 67% in the first eight months of the year. However the upward trend in seasonally-adjusted volumes has flattened in recent months.

View September air freight results (pdf)