by Mia Taylor
Last updated: 3:01 PM ET, Mon July 9, 2018
Global air passenger traffic reached record levels in May despite rising airline costs tied to jet fuel prices.
Data recently released by the International Air Transport Association (IATA) shows that demand (measured in revenue passenger kilometers or RPKs) rose 6.1 percent in May compared to the same month in 2017.
The new numbers also represent a slight uptick from the six percent year-over-year growth for April 2018.
"May was another solid month in terms of demand growth. As had been expected, we saw some moderation, as rising airline costs are reducing the stimulus from lower airfares. In particular, jet fuel prices are expected to be up nearly 26 percent this year compared to 2017. Nevertheless, the record load factor for the month signifies that demand for air connectivity is strong," Alexandre de Juniac, IATA's director general and CEO, said in a statement.
International passenger traffic demand in May rose 5.8 percent, up from 4.6 percent growth in April, according to IATA.
When broken down by region, Asia-Pacific airlines are leading the pack. Their traffic increased 8 percent in May compared to one year ago. Capacity meanwhile increased 7.6 percent.
"Passenger traffic has continued to trend strongly upwards in seasonally-adjusted terms, buoyed by a combination of robust regional economic growth and increases in the number of route options for travelers," IATA said of the Asia-Pacific growth.
In Europe meanwhile, May demand climbed 6.2 percent over May 2017, well above the 3.4 percent year-over-year growth recorded in April. Capacity rose 5.1 percent and load factor was up 0.8 percentage point to 83.5 percent, which was the highest among regions. Despite the impact of strikes in Europe and mixed signals regarding the economic backdrop, traffic growth remains healthy, said IATA.
In the Middle East, May demand growth slowed to 0.8 percent compared to a year ago. The figure also represents a drop from the 2.9 percent annual growth recorded in April.
"The earlier timing of Ramadan this year may have affected the result, but more broadly, the upward trend in traffic has slowed compared to last year," said IATA. May capacity increased 3.7 percent, and load factor fell 1.9 percentage points to 67.5 percent.
North American airlines are also faring well thus far in 2018. Traffic increased 4.9 percent in May compared to the same month last year. That's also a significant rebound from the 0.9 percent growth in April, which was a 36-month low. Capacity climbed 3.4 percent and load factor increased 1.2 percentage points to 82.0 percent.
In Latin America, there was a 7.5 percent increase in traffic in May compared to the same month last year, which was up from 6.5 percent growth in April. Capacity climbed 7.0% and load factor rose 0.4 percentage points to 81.6%.
"Economic disruption in Brazil may be contributing to a slight slowdown in demand growth in recent months, but this is not expected to have a long-term impact on the healthy traffic trend," IATA said.
Finally, in Africa traffic rose 3.8 percent in May compared to one year ago, which was an eight-month low. Capacity rose 3.2 percent and load factor edged up 0.4 percentage point to 66.4 percent.
The region's two largest economies, Nigeria and South Africa, may be moving in opposite directions again, with higher oil prices bolstering the Nigerian economy, while business confidence in South Africa has weakened again, said IATA.
While IATA said the airline industry is experiencing solid performance and net profits overall, the organization also cautioned that storm clouds are on the horizon including rising cost inputs, growing protectionist sentiment and the risk of trade wars, as well as geopolitical tensions.
"Aviation is the business of freedom, liberating people to lead better lives. Governments that recognize this will take steps to ensure aviation is economically sustainable. And aviation works best when borders are open to trade and people," said de Juniac.
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