The International Air Transport Association (IATA) announced global passenger traffic results for May showing that demand (measured in revenue passenger kilometers, or RPKs) rose 4.5% compared to the same month in 2018. This was in line with the revised April traffic growth of 4.4% and above the recent trough of 3.1% year-on-year growth recorded in March. However, it remains below the 20-year average growth rate of around 5.5%. Capacity (available seat kilometers or ASKs) climbed by a modest 2.7% and load factor rose 1.4 percentage points to 81.5%, surpassing last year’s record load factor of 80.1%. 

“Passenger demand growth has slowed compared to the past two years. This is in line with slumping global trade, rising trade tensions and weakening business confidence. In this challenging environment, airlines are managing capacity carefully in order to optimize efficiency,” said Alexandre de Juniac, IATA’s Director General and CEO. 

MAY 2019 (% YEAR-ON-YEAR)	WORLD SHARE1	RPK	ASK	PLF (%-PT)2	PLF (LEVEL)3
Total Market	100.0%	4.5%	2.7%	1.4%	81.5%
Africa	2.1%	2.2%	0.3%	1.2%	67.6%
Asia Pacific	34.4%	4.5%	3.5%	0.8%	80.2%
Europe	26.7%	5.4%	4.6%	0.6%	83.7%
Latin America	5.1%	6.5%	2.8%	2.9%	83.2%
Middle East	9.2%	0.7%	-5.9%	4.8%	73.2%
North America	22.5%	4.5%	3.2%	1.1%	85.1%

1-% of Industry RPKs in 2018                2-Year-on-year chnage in load factor                 3-Load factor level 

International Passenger Markets

International traffic demand rose 4.3% in May over the year-ago period, which was down from 5.1% growth in April. All regions recorded growth, led by airlines in Latin America. Total capacity climbed 2.1%, with load factor jumping 1.7 percentage points to 80.4%.

•  European carriers' May demand climbed 5.4% over May 2018, a deterioration from the 7.7% year-over-year growth recorded in April. Capacity rose 4.6% and load factor was up 0.7 percentage point to 84.2%, which was the highest among regions. Most of the region's growth, however, occurred in the first half of 2018, with demand moving broadly sideways since then.
•  Asia-Pacific airlines saw their traffic rise 4.0% in May compared to the year-ago period, an improvement over the 2.9% increase in April. Capacity increased 3.0%, and load factor edged up 0.8 percentage point to 78.6%. This is the second consecutive monthly increase in demand, but it still represents a soft outcome in a region that regularly saw double-digit growth rates over the past few years. The US-China trade tensions continue to weigh upon growth in the region. 

•  Middle East carriers' May demand growth decelerated to 0.8% compared to a year ago, from 3.3% annual growth recorded in April. This partly reflects the impact of the structural changes that are underway in the industry in the region. May capacity plunged 6.1%, and load factor soared 5 percentage points to 73.0%.
•  North American airlines' traffic rose 4.8% in May compared to May 2018, a slowdown from 5.6% annual growth in April. Capacity climbed 2.7% and load factor strengthened 1.7 percentage points to 83.6%. The comparatively strong US domestic economy, and US dollar is helping to offset any trade-related softening in international travel.
•  Latin American airlines experienced a strong 6.7% increase in traffic in May compared to the same month last year, which was well up from 5.1% growth in April. Passenger demand is currently holding up well, despite a challenging economic backdrop in a number of countries. Capacity climbed 4.0% and load factor jumped 2.1 percentage points to 84.0%, second highest among the regions.
•  African airlines posted a 2.1% traffic rise in May compared to the year-ago period, which was up from just 1.1% growth in April. Capacity climbed 0.1% and load factor increased 1.3 percentage points to 67.0%. Traffic between Africa and Europe continues to expand strongly, but economic growth in South Africa – a key regional economy and air transport market– contracted sharply in the first quarter and this is adversely impacting air passenger demand.  

Domestic Passenger Markets

 

APRIL 2019 (% YEAR-ON-YEAR)	WORLD SHARE1	RPK	ASK	PLF (%-PT)2	PLF (LEVEL)3
Domestic	36.0%	4.8%	3.8%	0.8%	83.4%
Dom. Australia	0.9%	1.1%	0.8	0.2%	77.0%
Domestic Brazil	1.1%	1.3%	-4.4%	4.6%	81.4%
Dom. China P.R.	9.5%	7.6%	7.1%	0.4%	83.2%
Domestic India	1.6%	6.0%	3.3%	2.3%	90.1%
Domestic Japan	1.0%	6.6%	2.0%	3.1%	71.6%
Dom. Russian Fed.	1.4%	10.6%	9.6%	0.7%	80.1%
Domestic US	14.1%	4.6%	3.9%	0.6%	86.0%

1-% of Industry RPKs in 2018                2-Year-on-year chnage in load factor                 3-Load factor level 

Domestic traffic increased 4.8% in May compared to May 2018, well above the 3% year-over-year rise recorded in April. Russia was the only market to see double-digit demand growth. Domestic capacity rose 3.8% and load factor climbed 0.8 percentage point to 83.4%.

•  Russia's domestic traffic rose 10.6% year-over-year, which is up slightly from the 10.4% year-over-year growth recorded for April. Russia continues to benefit from favorable economic conditions and lower airfares.
•  Japan's domestic traffic rose 6.6% in May, up from 4.1% growth in April and the strongest performance since summer 2017. Fare stimulation, combined with robust economic growth, contributed to the result.

The bottom line

"Aviation is the business of freedom, connecting people and trade and creating new opportunities for growth and development. But to be effective, the business of freedom relies on borders that are open to the movement of people and goods—and aircraft. In recent weeks, we have seen extensive airspace closures owing to political tensions. These closures have contributed to longer and less efficient routings, higher operating costs and increased carbon emissions. Without any compromise on safety, it is vital that governments work to minimize airspace closures so that the Business of Freedom can continue to deliver its benefits as efficiently as possible," said de Juniac.

Read de Full Passenger Analysis for May (pdf)

CARGO

The International Air Transport Association (IATA) released data for global air freight markets showing that demand, measured in freight tonne kilometers (FTKs), decreased by 3.4% in May 2019, compared to the same period in 2018. This was a slight improvement on the 5.6% contraction in April.  

In seasonally-adjusted terms, the level of FTKs increased modestly for the third consecutive month, suggesting that the low point of this cycle may be behind us, although the market remains weak. 

Freight capacity, measured in available freight tonne kilometers (AFTKs), rose by 1.3% year-on-year in May 2019. Capacity growth has now outstripped demand growth for the 13th consecutive month. 

Air cargo demand has suffered from very weak global trade volumes and trade tensions between the US and China. This has contributed to declining new export orders. The indicator for new manufacturing export orders, part of the global Purchasing Managers Index (PMI), has indicated falling orders since September 2018.

“The impact of the US-China trade war on air freight volumes in May was clear. Year-on-year demand fell by 3.4%. It’s evidence of the economic damage that is done when barriers to trade are erected. Renewed efforts to ease the trade tensions coming on the sidelines of the G20 meeting are welcome. But even if those efforts are successful in the short-term, restoring business confidence and growing trade will take time. And we can expect the tough business environment for air cargo to continue,” said Alexandre de Juniac, IATA's Director General and CEO.   

MAY 2019 (% YEAR-ON-YEAR)	WORLD SHARE1	FTK	AFTK	FLF (%-PT)2	PLF (LEVEL)3
Total Market	100.0%	-3.4%	1.3%	-2.3%	46.8%
Africa	1.7%	8.0%	13.4%	-1.9%	38.6%
Asia Pacific	35.4%	-6.4%	0.3%	-3.7%	52.0%
Europe	23.4%	-0.2%	2.5%	-1.4%	51.3%
Latin America	2.6%	2.7%	6.6%	-1.3%	35.3%
Middle East	13.3%	-6.9%	-1.6%	-2.7%	46.9%
North America	23.7%	-1.6%	1.4%	-1.2%	39.8%

1- % of Industry FTKs in 2018          2- Year-on-year change in load factor          3- Load factor level

Regional Performance

Airlines in Asia-Pacific and the Middle East suffered sharp declines in year-on-year growth in total air freight volumes in May 2019, while North America and Europe experienced more moderate declines. Africa, and Latin America both recorded growth in air freight demand compared to May last year. 

Asia-Pacific airlines saw demand for air freight contract by a hefty 6.4% in May 2019, compared to the same period in 2018. The US-China trade war and weaker manufacturing conditions for exporters in the region have significantly impacted the market. With the region accounting for more than 35% of total FTKs, this performance is the major contributor to the weak industry-wide outcome. Air freight capacity increased by 0.3% over the past year.  

North American airlines saw demand decrease by 1.6% in May 2019, compared to the same period a year earlier. Capacity increased by 1.4% over the past year. The recent easing of growth again can be partly attributed to the falling global trade volumes and US-China trade tensions. International FTKs between Asia and North America have fallen by almost 8% in year-on-year terms.

European airlines posted a 0.2% decrease in freight demand in May 2019 compared to the same period a year earlier. This is a significant improvement on the 6.9% contraction in April. Weaker manufacturing conditions for exporters in Germany, indications of a slowing in the regional economy, and ongoing uncertainty over Brexit, have impacted the recent performance. Capacity increased by 2.5% year-on-year. 

Middle Eastern airlines’ freight volumes decreased 6.9% in May 2019 compared to the year-ago period. Capacity decreased by 1.6%. A clear downward trend in seasonally-adjusted international air cargo demand is now evident with weakening air freight volumes to/from North America and to/from Asia Pacific contributing to the softer performance. Once again, these flows reflect the broader weakness in global trade volumes, combined with the impact of the restructuring of airline business models currently underway in the region.  

Latin American airlines experienced an increase in freight demand growth in May 2019 of 2.7% compared to the same period last year and capacity increased by 6.6%. With international FTKs falling by 0.5% over the same period, the total increase highlights a healthy performance in the region’s domestic air cargo markets. 

African carriers posted the fastest growth of any region in May 2019, with an increase in demand of 8.0% compared to the same period a year earlier. This continues the upwards trend in FTKs that has been evident since mid-2018 and makes Africa the strongest performer for the third consecutive month. Capacity grew 13.4% year-on-year. Strengthening trade and investment linkages with Asia have underpinned a double-digit increase in air freight volumes between the two regions over the past year.

Read the full Freight Analysis for May (pdf)