Passenger travel records strong growth - IATA

The International Air Transport Association (IATA) recorded global passenger traffic results for July showing demand growth of 5.3% (measured in revenue passenger kilometers or RPKs) over the previous July. Capacity expanded exactly in tandem with demand (5.3%), resulting in a global load factor of 82.3%, unchanged from last year.

"July was another strong month of growth for air travel. People are connecting by air in ever greater numbers. That's true across all regions. Despite the various economic challenges, the outlook for passenger travel remains broadly positive,"said IATA's Director General and CEO, Tony Tyler.

"The overall sluggishness at the beginning of the year appears to be behind us with growth in China and other emerging economies offsetting recent deterioration in the Eurozone," he said.

July international passenger demand rose by 5.5% compared to the corresponding month in 2013. This was outstripped by a capacity expansion of 6.2% which resulted in a slight weakening of the load factor to 81.9% (down 0.5 percentage points from the corresponding period of the previous year, but yet at a high level).

European carriers reported growth of 5.3% in July compared to a year ago. Capacity expanded slightly more aggressively at 5.6%, but the region still reported a very high load factor of 85.1%.

While this is a robust performance, latest indicators show a weakening in key European economies such as Germany reflecting the impact of sanctions associated with the deepening Russia-Ukraine crisis.

Asia Pacific airlines are benefiting from an improved economic environment. Demand growth was slightly above the global average at 5.6% which lagged a capacity increase of 6.8%. Load factor fell 0.9 percentage points to 78.9%.

The biggest factor affecting demand development is the response of the Chinese economy to stimulus measures which saw year-on-year GDP growth reach 7.5% in July.

North American airlines saw international demand grow by 2.9% - the slowest of all regions. Capacity expansion was nearly double that at 5.6%, nonetheless the load factor stood at 85.1%. Overall business conditions are the strongest since mid-2010, which bodes well for the region's carriers.

Airlines in the Middle East recorded the strongest growth at 9.2%. This was ahead of capacity expansion of 8.2%. Load factor rose 0.7 percentage points to 78.0%.

The carriers are benefitting from the strength of regional economies and solid growth in business-related premium travel.

Latin American carriers reported growth of 6.7%, in line with a 6.6% capacity increase. Load factors stood at 82.5%. Robust economic performance in Colombia, Peru and Chile was being offset by weakness in Brazil. Furthermore, regional trade volumes are not expanding, the impact of which has been a dialing down of travel demand from the 8% growth range experienced in 2013.

African airlines reported growth of 4.9%, reversing the year-on-year contraction experienced in June. With capacity rising 4.5%, load factor improved slightly to 70.2%.

The biggest factor impacting international traffic demand in July was the slowdown of the South African economy.