Revenue Passenger Kilometers Rose Nearly 6 Percent Over Previous Year

The IATA announced global passenger traffic results for November showing continued strong traffic growth above the 10-year average rate of 5.6%. Total revenue passenger kilometers (RPKs) rose 5.9% compared to the year-ago period. Although below the October rate of 7.1%, this largely was owing to the impact of factors that are expected to be short-lived, including the cessation of operations by Transaero, Russia’s second largest carrier, and labor strikes at Lufthansa.

The healthy demand continued despite some softening in economic growth, in large part owing to falling fares. Data for the first ten months of the year show a 5% decline in average fares in currency-adjusted terms. November capacity (available seat kilometers or ASKs) increased by 4.2%, and load factor rose 1.3 percentage points to 78.0%. 

“Consumers continue to benefit from lower fares, which are spurring demand. The economy benefits from the stimulus to consumer spending. And airlines are starting to achieve minimum acceptable profit levels. It’s good news all around, but as we open 2016, economic risks are mounting,” said Tony Tyler, IATA’s Director General and CEO.

November international passenger demand rose 5.6% compared to November 2014, with airlines in all regions recording growth. Total capacity climbed 4.1%, and load factor edged up 1.1 percentage points to 76.2%.

Domestic travel demand rose 6.4% in November compared to November 2014 but results were mixed, with Brazil, Russia and Japan all showing declines. Domestic capacity climbed 4.4%, and load factor improved 1.6 percentage points to 81.1%.

“The airline industry is delivering solid financial and operational performance. The industry’s return on capital for 2015 and 2016 is expected to exceed its cost of capital—a very rare occurrence," Tyler (pictured) said. "This means we are on the path toward financial sustainability. Consumers are benefitting from lower fares, and airlines are able to invest in new aircraft that are more comfortable, quieter and more environmentally friendly.

"Passenger demand remains strong; however, the ongoing turmoil in the global financial markets and concerns over slowing economic growth in China are casting a shadow over the New Year.

"2016 will be a historic year for aviation as States come together at the 39th International Civil Aviation Organization Assembly to discuss—and I hope agree—a market-based-measure that will allow airlines to achieve carbon-neutral growth from 2020,” said Tyler.

(Source: IATA news release)

FMI: www.iata.org