Wednesday 19 December 2018

Economic fears hit air travel as global growth moderates

 

IATA director general and CEO Alexandre de Juniac
IATA director general and CEO Alexandre de Juniac
John Mulligan

John Mulligan

Consumers aren't snapping up as many low air fares as they were earlier in the year, according to the International Air Transport Association (IATA).

Releasing new data for October, the global airline representative body said that while passenger demand rebounded that month compared to September, the overall picture is one of moderating traffic growth compared to earlier in the year.

Traffic demand rose 6.3pc in October compared to 12 months earlier, which was ahead of the 5.5pc growth notched up in September, noted IATA. Airline capacity also rose 6.3pc in October.

"October's healthy performance is reassuring after the slower demand growth in September - some of which was attributable to weather-related disruptions," said IATA director general and CEO Alexandre de Juniac.

"However, the bigger picture is that traffic growth has moderated compared to earlier in the year, reflecting a more mixed economic backdrop and reduced demand stimulation from lower fares," he added.

In Europe, traffic demand was 7.5pc higher in October year-on-year, which was the strongest growth recorded in any global region, and significantly ahead of the 5.3pc growth rate in September.

Capacity was 7pc higher in Europe during October, and the load factor - the percentage of available seats sold - was 85.2pc, which was also the highest of any global region.

"Given mixed signals on the economic situation for the region, it's unclear if the rebound is sustainable," warned IATA, however.

A number of macro economic indications suggest a slowdown in Europe, while continuing trade wars and Brexit fears are also fuelling uncertainty.

"Demand for air travel is strong as we head into the holiday travel season," said Mr de Juniac. "Trade wars and uncertainty around the political and economic impact of Brexit remain concerns but the recent easing of fuel prices is a welcome development."

Irish Independent

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