Global air travel rose 5.3% in June on international routes. The deceleration, compared with a strong result in May, was largely due to slower growth in Asia-Pacific as well as some holiday impacts in the Middle East. International air freight was sluggish, expanding just 1.4%. The June result confirms that growth in air freight volumes has slowed, which is consistent with declines in trade activity, mostly in emerging markets.

 

Traffic capacity growth on international markets

Global air travel rose 5.3% in June on international routes. The deceleration, compared with a strong result in May, was largely due to slower growth in Asia-Pacific as well as some holiday impacts in the Middle East. International air freight was sluggish, expanding just 1.4%. The June result confirms that growth in air freight volumes has slowed, which is consistent with declines in trade activity, mostly in emerging markets.

International air passengers by seat class

Economy-class passenger numbers have grown slightly faster relative to premium passengers since the recession. Economy-class leisure travel is more price-sensitive than business-related premium travel, and will benefit from declining fares. Gains in premium passenger numbers have been dampened by overall weakness in business travel demand drivers.

Premium traffic growth

Premium travel rose 4.1% in May, slower than the rise in economy-class travel of 6.4% year-on-year. This reflects continued weakness in the factors driving business-travel demand, with global business confidence being dragged down by emerging markets.

World trade in goods and Air cargo

Growth in freight tonne kilometers (FTKs) has continued to mirror developments in world trade. Since late 2014, there has been a trend change in world trade activity and a considerable decline in volumes, particularly in emerging Asia. The unusual spike in international FTKs seen in February was partly due to the timing of Lunar New Year and the backlog at US West Coast sea ports, but the trend in FTKs has been flat since Q4 2015.

 

Purchasing managers confidence survey and air freight demand

Manufacturing business activity can be a good leading indicator of air freight demand. Surveys of purchasing managers by Markit shows a decline in manufacturing activity compared with a year ago. This suggests weak growth in air freight volumes is likely to continue in the near term. The weakness, however, is mostly coming from emerging markets; the outlook for most major advanced economies is positive and this could alleviate downward pressure on manufacturing activity and air freight demand.

 

Business confidence

Airline profit expectations for the year ahead have dipped from previous highs, but remain positive, according to IATA's quarterly survey of airline CFOs and heads of cargo in July. Volume growth is expected to continue for the year ahead, but not at the strong pace that was anticipated earlier in the year.

 

 


 

 

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