Global Air Travel Demand Strengthens in July

Man walking in airport
Travel News 08 Sep 2016

Low fares helped propel global air travel demand growth in July, although demand growth on domestic routes stalled, according to the International Air Transport Association.

Global demand rose 5.9 percent year over year, a faster rate than the previous five months, IATA reported. It went up in every region. Airlines increased global capacity 6 percent year over year, and load factor dropped 0.1 percent points to 83.7 percent from July 2015's record.

In July 2016, "demand was stimulated by lower fares which, in turn, were supported by lower oil prices," IATA director general and CEO Alexandre de Juniac said in a statement. "Near-record-high load factors demonstrate that people want to travel."

Travel demand on international routes rose 7.1 percent year over year in July, compared with a 5 percent increase in June, and capacity increased 7.3 percent. Demand growth was lowest among European carriers (4.1 percent) due in part to recent terrorist attacks. Those carriers increased capacity 4.7 percent in July, lowering their load factor 0.5 percentage points to 86.7 percent. Even so, that load factor was highest among the global regions.

Terrorism concerns in Europe also are affecting traffic in other regions. International travel demand on Asia/Pacific carriers increased 9.8 percent year over year, but that growth owes more to trips within Asia. According to IATA, "Reports suggest that Asian passengers are putting off traveling to Europe in favor of regional trips owing to terrorism fears." Asia/Pacific capacity increased 8.6 percent, and load factor increased 0.9 percentage points to 81.7 percent.

North American carriers saw demand for international routes increase 4.8 percent, boosted in part by transpacific demand, IATA reported. Capacity increased 5.1 percent, and load factor decreased 0.3 percentage points to 86.1 percent.

International travel demand also increased for carriers in the Middle East (13.3 percent), Latin America (7.5 percent) and Africa (7.4 percent).

Demand on domestic routes, however, increased 3.8 percent in July, the lowest growth rate in 19 months. Demand growth soared in India (26.2 percent) and China (9.7 percent), but "mature markets" such as the United States, Australia and Japan are "stuck in neutral," according to IATA. Domestic air travel demand declined in Brazil (6.8 percent) and Russia (7.5 percent).