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Low ticket prices boost air travel

business / Headlines
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Low ticket prices boost air travel

/ 05:10 AM August 08, 2017

Passenger demand grew in June as the commercial aviation industry benefited from relatively lower ticket prices and optimism on the direction of the global economy, the International Air Transport Association (Iata) said.

Iata, the trade organization of the world’s airlines, said demand as measured by revenue passenger kilometers went up by 7.8 percent in June 2017 compared to the same period in 2016.

“A brighter economic picture and lower airfares are keeping demand for travel strong,” said Alexandre de Juniac, Iata director general and CEO, in a statement.

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“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,” he added.

According to Iata, growth in June this year followed the 7.7 percent growth recorded in May.

From January to June this year, the industry saw traffic growth hit a 12-year high.

It added that load factor, a measure of demand against an airline’s capacity, stood at 80.7 percent in the first half of 2017.

Iata said international passenger demand was up 7.5 percent in June compared to the same period in 2016.

It added that all regions saw growth, led by Africa, which had lagged in the past. International capacity was up 6.2 percent, while seat load factor grew 1 percentage point to 80.6 percent, figures from IATA showed.

As noted, African carriers saw traffic jump 9.9 percent in June, followed by Latin American carriers, which grew 9.7 percent.

Asia-Pacific carriers saw June traffic growth at 9.1 percent, Iata said.

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“The overall upward trend in seasonally-adjusted traffic remains strong, although volumes have slipped in recent months. Traffic on Asia-Europe routes continues to trend upwards following terrorism related disruptions in early 2016,” Iata said on the Asia-Pacific figures.

“However, solid demand growth on international routes within Asia has paused,” it added.

Asia-Pacific carriers saw capacity increased 7.9 percent, while load factor rose almost 1 percentage point to 79.3 percent.

“This is all good news. The demand for travel is strong and that, in turn, will make a positive contribution to the global economy,” de Juniac said.

Iata also called on governments to improve air transport infrastructure.

There are plenty of examples linking connectivity and economic prosperity. But few governments have been able to deliver on the imperatives of sufficient capacity, quality aligned with user needs and affordability. This year’s strong growth is a reminder that there is no time to lose,” de Juniac said.

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TAGS: Air Travel, Business
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