IATA reports soft start to peak travel period

The International Air Transport Association (IATA) on Friday announced slowing global passenger demand growth for July.

Total revenue passenger kilometres (RPKs) rose 3.6 per cent compared to the same month in 2018. This was down from 5.1 per cent annual growth recorded in June. All regions posted traffic increases.

Monthly capacity- available seat kilometres or ASKs- increased by 3.2 per cent and load factor rose 0.3 percentage point to 85.7 per cent which is a new high for any month.

"July's performance marked a soft start to the peak passenger demand season," said IATA's Director General and CEO Alexandre de Juniac.

"Tariffs, trade wars and uncertainty over Brexit are contributing to a weaker demand environment than we saw in 2018. At the same time. the trend of moderate capacity increases is helping to achieve record load factors," he said in a statement.

July international passenger demand rose 2.7 per cent compared to July 2018 which was a deceleration compared to the 5.3 per cent growth recorded in June. Capacity climbed 2.4 per cent and load factor edged upward 0.2 percentage point to 85.3 per cent. All regions reported growth led by airlines in Latin America.

Asia Pacific airlines' July traffic rose 2.7 per cent over the year-ago period, a slowdown compared to June growth of 3.9 per cent and their weakest performance since early 2013. Capacity increased 2.4 per cent and load factor rose 0.2 percentage point to 82.6 per cent.

US-China and Japan-South Korea trade tensions, as well as political tensions in Hong Kong -- all, have weighed on business confidence.

Domestic travel demand outperformed international growth in July as RPKs rose 5.2 per cent in markets tracked by IATA, up from 4.7 per cent growth in June. Domestic capacity climbed 4.7 per cent and load factor rose 0.4 percentage point to 86.5 per cent.

China's domestic traffic rose 11.7 per cent in July -- an acceleration over 8.9 per cent growth recorded in June and the strongest domestic performance. Growth is benefitting from lower fares and more connections.

Japan's domestic traffic climbed 4.7 per cent in July, up from 2.6 per cent in June. Business confidence and economic growth are relatively positive at the moment.