A stronger global economy is contributing to passenger traffic growth but rising airline costs and political instabilities could curtail demand, IATA has said.
In June, IATA reported a 7.8% growth in demand (measured in revenue passenger kilometers or RPKs), compared to the year-ago period.
As costs rise, this stimulus of lower fares is likely to fade. And uncertainties such as Brexit need to be watched carefully
For the first six months of 2017, the industry has experienced a 12-year high in traffic growth, at 7.9%.
“A brighter economic picture and lower airfares are keeping demand for travel strong,” said IATA Director General and CEO Alexandre de Juniac.
“But as costs rise, this stimulus of lower fares is likely to fade. And uncertainties such as Brexit need to be watched carefully. Nonetheless, we still expect 2017 to see above-trend growth.”
Regionally, African airlines reported the strongest demand growth, with traffic soaring 9.9% in June compared to the year-ago period.
The slowest growth was reported by Middle Eastern carriers, which saw traffic increase by just 2.5% compared to June 2016.
The slow demand growth is most visible in the Middle East-North America market. Contributing factors include the United States’ recently-lifted laptop ban, as well as a travel ban restricting travel to the US from six Muslim-majority countries.