Air Passenger Market Analysis

Transcript

1 Air Passenger Market Analysis 201 9 January Passenger growth starts the year on a positive note (RPKs) rose to 6.5% in January • Annual growth in industry - wide revenue passenger kilometres , its fastest pace in 6 months. We caution that traffic data at this time of year can be impacted by the timing of Lunar New Year. • Capaci ty continues to grow broadly in - line with demand, with the load factor at 79.6% this mo nth . posting • China was the fastest growing domestic market this month, with India & Russia also do uble - digit RPK growth . suggesting GDP growth softened data that Q4 Pick - up in annual passenger growth in January... across a number of the world’s key economies . - Industry wide revenue passenger kilometers (RPKs) started the year on a positive note, increasing by On top of that , the global com posite Purchasing 6.5% year - on - year, the fastest pace since mid - 2018 . a useful leading Managers’ Index – indicator of air The result is just ahead of the average RPK growth has been passenger demand growth in the past – but lies some rate seen over the past decade (6.1%) (see Chart 2) and is trending downwards recently way below its five - year average (7.1%). currently September 2016. at its lowest levels since upward trend in seasonally adjusted (SA) he All told, t index point to RPK Recent developments in the January slighty , followi n RPKs g the in accelerated consistent with our growth at a pace of around 6% , moderation seen over the second half o f 2018 (see from 6.5% a little current forecast for 2019, but down . Chart 1) RPKs have risen at 4.6 % annualized pace in 2018. since mid earlier - 2018, down from closer to 9% seen weakenin e g in 3 (over) , while th As shown in Chart in the year it is too soon to think that this . For now, remains broadbased across the business confidence month’s pick - up represents a shift in trend. developed markets, the emerging countries show a Economic backdrop remains less supportive more mixed picture ; the PMI currently indicates - dustry n in 2H18 The slowdown in i and Russia wide RPK growth ongoing strong growth for India , Brazil seem s to be economic future of ongoing concerns about the corresponds to less backdrop while the economic expansion , with the most recent the global volume Air passenger growth and global Chart 2 – Air passenger volumes Chart 1 – composite business confidence measure - % year on - year Industry RPKs (billion per month) indices Diffusion 16% 65 800 Growth in industry RPKs (RHS) 750 60 12% Actual 700 55 8% 650 4% 50 Global composite PMI index 600 (adv. 2 months, LHS) Seasonally 45 0% 550 adjusted -4% 40 500 450 35 -8% 400 30 -12% 2015 2016 2017 2018 2019 2014 2012 2014 2008 2009 2010 2011 2007 2013 2019 2015 2016 2017 2018 Sources: IATA Economics, IATA Monthly Statistics Sources: IATA Economics, IATA Monthly Statistics, Markit Air passenger market overview - January 2019 January 2019 (% year-on-year) World 2018 calendar year (%year-on-year) 3 2 2 3 1 RPK ASK RPK ASK PLF (%-pt) PLF (level) PLF (level) PLF (%-pt) share TOTAL MARKET 100.0% 6.5% 6.4% 0.1% 79.6% 6.6% 6.1% 0.3% 81.9% 63.9% 6.0% 5.8% 0.2% 79.8% 6.3% 5.7% 0.4% 81.2% International 83.1% 36.1% 7.5% Domestic 79.3% 7.1% 6.8% 0.2% 7.3% -0.1% 1 2 3 % of industry RPKs in 2018 Year-on-year change in load factor Load factor level – 1 January 2019 Air Passenger Market Analysis

2 European RPKs continue to trend solidly upwards in outh Africa and passenger volumes in S supportive for ASEAN. seasonally adjusted terms, although at softer pace a October notably, than in recent months ( & 3 Economic conditions (monthly data from – Chart November ). In part, this likely reflects growing composite PMIs, selected regions and countries) economic backdrop, uncertainty over the region’s yellow Legend: >50 and rising = green red ; <50 = ; >50 but stable or falling = Business confidence 2017 2018 2019 including t he ongoing lack of clarity regarding Brexit. 1 1 2 2 2 2 2 World 2 1 2 2 2 1 1 1 1 1 1 1 2 2 1 1 1 2 Developed markets 1 1 1 1 1 1 1 1 1 1 1 1 1 2 2 1 1 2 2 2 2 2 2 2 1 2 2 2 1 US 2 1 2 2 2 2 2 1 1 1 1 2 1 2 2 2 1 1 1 1 2 2 Chart International passenger traffic growth by – 5 1 2 2 1 2 1 1 1 2 2 1 2 2 2 2 2 2 2 2 2 2 Eurozone 1 1 1 1 2 2 2 2 1 UK 1 2 2 1 2 2 1 1 1 2 2 2 2 1 1 2 2 2 2 2 1 2 1 1 1 1 1 1 2 2 2 1 2 1 1 2 2 1 2 Japan 1 2 2 1 2 1 1 airline region of registration Australia 2 1 1 1 2 1 2 2 2 2 2 3 1 1 1 1 1 2 2 2 2 2 1 1 2 1 1 Emerging markets 1 1 1 1 2 2 1 1 2 1 1 1 1 2 2 2 2 2 2 2 2 1 1 2 Dec 2018 Jan 2019 1 China 2 1 2 2 2 2 1 1 2 2 2 1 1 1 2 2 2 1 2 2 2 2 2 1 1 1 1 2 2 1 1 2 1 2 3 1 1 1 1 1 3 3 1 1 1 1 2 3 India 1 1 3 3 3 3 1 1 3 3 3 1 3 3 Brazil 1 1 1 1 3 3 1 3 3 1 1 1 6.0% Industry 2 2 2 2 1 2 1 1 2 1 2 2 2 2 2 1 2 1 1 1 1 2 1 Russia 2 2 5.3% 1 3 1 1 1 1 3 2 1 ASEAN* 1 1 1 2 1 3 3 2 2 2 3 2 1 1 1 2 1 3 3 3 3 3 3 2 3 2 2 2 2 1 South Africa 3 3 3 3 3 3 1 2 1 3 1 1 7.7% 1 1 2 1 1 Nigeria 1 2 1 1 2 2 2 2 2 2 1 1 1 1 1 1 1 1 1 1 Europe 8.6% Highly supportive Partly supportive Least supportive 7.1% Asia Pacific Sources: IATA, Markit, Thomson Reuters Datastream * Manufacturing PMI 5.0% 5.8% L. America 6.1% 5.1% steady compared with Load factor January 2018 Africa 3.8% wide available seat kilometres (ASKs) grew - Industry N. America 4.7% 3.7% year in January, - - slower on by 6.4% year only slightly Middle East 1.5% - 0.1% wide - industry of the pace than RPKs. As a result, the was essentially passenger load factor (PLF) 3% 4% 5% 6% 7% 8% 9% 10% 1% -2% 2% -1% 0% - year) on - International revenue passenger kilometres (% year at 79.6% . unchanged from a year ago, Sources: IATA Economics, IATA Monthly Statistics Across the regions , t he p erformance (see Chart 4) ...followed closely by Asia Pacific carriers , with carriers in Latin America was mixed this month International RPKs flown by Asia Pacific airlines rose (82.5%) . recording the highest PLF solid a year in January, - on - by 7.1% year 4 Chart Passenger load factors by region – improvement compared to 5.0% in Dec . ember Jan 2018 Jan 2019 Although the upward trend weakened during briefly All - time Jan low* - time Jan high* All 79.6% 79.6% Industry Q3 2018 amidst disruptions caused by natural SA with disasters, demand recovered shortly after , 82.5% 83.0% L. America assenger volumes increasing at a 9% annualized p 81.0% 80.3% Asia Pacific pace since then. 79.6% 80.4% Europe The generally strong demand for flying in the region 79.5% 79.1% N. America gains widespread has been underpinned by in Middle East 76.0% 77.1% , along with household incomes over the recent years . an increase in the number of airport pairs Africa 70.9% 69.7% concerns of a growth moderation in Notwithstanding 75% 60% 80% 90% 70% 85% 65% Passenger load factors (% of available seat kms, actual) China, expect this favorable generally commentators Sources: IATA Economics, IATA Monthly Statistics *Data from 1990 onwards economic backdrop to be sustained in 2019. up... - l RPK growth picked Internationa Growth generally unchanged in Latin America... RPK to international growth in l Annua slightly lifted s slightly Latin America airlines reported only lower n 6.0%yoy in early - 2019 , from 5.3% in December (see rate for international RPKs in year - year - growth on Chart Although seasonally adjusted ). 5 volumes January compared to 5 . 8 at the previous month ( % across all the regional markets, the trended upwards 6 currently vs Indeed, over the past six months, %). . 1 rowth performance showed mixed year - on - year g the year - on - year growth rate has been relatively . results steady, averaging around 6%. However , there are tentative signs that, in SA terms, growth chart again... European airlines top the passenger volumes for the Latin America Despite a , modest slowdown versus December accelerated a little in recent ve international market ha showed the fastest growing European carriers months. regions in passenger demand of all international ... ...but rises for airlines based in Africa on ) year - - year (7.7% January topping – growth the year growth in international RPKs flown by Year - on - chart for the fourth consecutive month. to 5.1%yoy . airlines based in Africa rose in January January 2019 – Air Passenger Market Analysis 2

3 C hart 6 – Domestic RPK growth by mar ket Although this is an improvement compared to , th assenger December 2018 e upward trend in SA p Dec 2018 Jan 2019 softened in recent months with has generally traffic 7.3% Industry 5.6% concerned about the ing remain businesses 14.1% Domestic China 7.9% economic outlook in key countries in the region . 12.4% Domestic India 14.8% business confidence has been falling sharply Indeed, 10.4% Domestic Russia 12.4% since November and remains below the in Nigeri a 5.8% mark consistent 50 with contraction for Egypt and - Domestic USA 4.0% South Africa. 3.0% Domestic Japan 4.7% ...and North America 0.3% Domestic Brazil 3.4% Annual growth in nternational RPKs rose to 4.7% i 0.3% Dom. Australia 1.8% - carriers based in North Americ a this year - on - year for 17% -5% -1% 1% 3% 5% 7% 9% 11% 13% 15% -3% 19% 21% 23% r, with SA traffic , up from 3.7% in Decembe month Domestic revenue passenger kilometres (% year - - on year) Sources: IATA Economics, IATA Monthly Statistics The r egion ’s air passenger . also lifting volumes underpinned demand in recent years by has been Indi double & Russia also post a - digit growth strong economic conditions which comparatively Despite being overtaken by China on this occasion, oyment rate and have delivered a low unempl the annual rate of RPK growth for the domestic India bolstered consumer spending . - market remained in double with 12.4%yoy digits, at SA volumes trending up this month. showing signs of a However, with the US economy – moderate its GDP gr ew by 2.6% in Q4 , slowing for the Russia domestic market have trended RPKs down from 3.4% i n Q3, for example – it becomes less - on - sharply higher in 2H18, recording a 10.4% year as clear whether economic conditions will remain That said year rate in January. pace of growth , the that seen previously, has moderated somewhat from supportive in 2019 as they were last year . passenger traffic but the healthy upward trend in Middle East RPK growth becomes positive again . in place remains Carriers based in the Middle East flew 1.5% more month high - domestic growth hits a 4 US – a healthy international RPKs than they did a year ago - Annual growth in Domestic US RPKs rose to a four While 2018. - recovery from a flat growth seen in end month high of 5.8% in January , from an even 4.0% in S A the picked up have also passenger volumes . Nonetheless, the upward trend in SA December following modestly, two months of sharp decline, it is has 2018 - moderated since mid , traffic in this ma rket improvement in the e W too early to call a clear trend. concerns about the outlook for the US reflecting will continue to monitor these developments closely. economy, with China. including trade tensions month high Domestic RPK growth increases to 5 - Australia in Growth ... was subdued Brazil & - wide d RPK growth increased to Industry omestic The domestic Brazil and Australia passenger its registering on year in January, fastest - 7.3% year - at ; markets posted the same growth rate in January (see Chart 6) August 201 pace since . 8 - on - year. just 0.3% year Domestic China tops growth chart this month the slowest in For Brazil, such growth was about two Amongst the key domestic markets we consistently years , while for Australia, the outcome marked a topped the RPK growth chart follow, domestic China - year growth after return to a positive rate of year on - this month for the first time since July 2017 two months of declines. (14.1%yoy). This comes despite ongoing concerns ...and eased a little in Japan this month US - regarding the possible impacts of the China eased RPK growth in the domestic Japan market trade tensions . and slowing economy in January , a moderate to somewhat, 3.0%yoy The timing of Lunar New Year celebrations can resu lt maintaining the modest upwards trend that has been in more than the usual degree of data volatility a t this in place since around the middle of 2016. H . time of the year in 2019 the timing of LNY owever, suggests that while the pattern of travel may change, it should be contained within the month of February. IATA Economics [email protected] th 2019 7 March Air Passenger Market Analysis 3 2019 January –

4 Air passenger market detail - January 2019 January 2019 (% year-on-year) World 2018 calendar year (%year-on-year) 3 2 3 2 1 ASK RPK ASK RPK PLF (%-pt) PLF (%-pt) PLF (level) PLF (level) share TOTAL MARKET 6.5% 6.4% 0.1% 100.0% 6.6% 6.1% 0.3% 81.9% 79.6% Africa 2.1% 3.7% 2.0% 1.2% 70.9% 2.3% 1.0% 0.9% 71.4% Asia Pacific 8.5% 7.5% 0.7% 81.0% 8.6% 7.9% 0.5% 81.5% 34.5% 84.5% 26.7% 7.4% 8.5% -0.8% 79.6% 6.7% 5.9% 0.6% Europe 6.6% 81.6% -0.3% Latin America 5.1% 4.8% 5.4% -0.4% 82.5% 6.2% Middle East 1.5% 3.0% -1.1% 76.0% 4.0% 4.9% -0.6% 74.8% 9.2% North America 22.4% 5.2% 4.7% 0.4% 79.5% 5.0% 4.7% 0.2% 83.8% International 63.9% 6.0% 5.8% 0.2% 79.8% 6.3% 5.7% 0.4% 81.2% 5.1% Africa 1.8% 2.9% 1.5% 70.9% 6.4% 4.4% 1.3% 70.9% Asia Pacific 7.1% 5.1% 1.5% 81.7% 7.2% 6.4% 0.6% 80.5% 18.9% 85.0% 23.9% 7.7% 8.8% -0.9% 80.3% 6.7% 6.0% 0.5% Europe 7.7% 81.8% -0.6% Latin America 2.7% 5.8% 6.7% -0.7% 82.8% 6.9% 4.2% 75.6% -1.3% 3.2% 1.5% 8.9% Middle East 5.2% 74.7% -0.7% North America 4.7% 3.5% 1.0% 80.6% 5.1% 3.8% 1.0% 82.5% 7.6% Domestic 36.1% 7.3% 7.5% -0.1% 79.3% 7.1% 6.8% 0.2% 83.1% 4 78.9% 1.1% 0.9% 0.3% -0.5% 0.6% 80.1% 1.4% 0.0% Dom. Australia 4 0.3% 0.7% -0.3% 1.1% 4.8% 5.1% -0.2% 81.3% 84.5% Domestic Brazil 4 9.5% 14.1% 14.7% -0.4% 81.0% 11.8% 12.0% -0.2% 84.1% Dom. China P.R. 4 86.5% 86.1% 0.5% 19.0% 1.6% 12.4% 16.1% -2.8% 18.3% Domestic India 4 71.8% 0.8% 0.8% 66.1% 0.8% 1.8% 3.0% 1.0% 2.0% Domestic Japan 4 10.4% 7.5% 83.5% 1.4% 10.1% 10.5% 0.0% 75.4% 2.0% Dom. Russian Fed. 4 5.1% 78.9% 0.1% 5.7% 5.8% 14.1% 84.6% -0.2% 5.4% Domestic US 2 1 3 % of industry RPKs in 2018 Year-on-year change in load f actor Load f actor level 4 Note: the seven domestic passenger markets f or w hich broken-dow n data are available account f or 30% of global total RPKs and approximately 82% of total domestic RPKs Note: the total industry and regional grow th rates are based on a constant sample of airlines combining reported data and estimates f or missing observations. Airline traf f ic is allocated according to the region in w hich the carrier is registered; it should not be considered as regional traf f ic. Economics Consulting IATA New release alerts Get the data To find out more about our tailored To receive email notifications from IATA Access data related to this briefing through economics consulting solutions, visit: Economics, select ‘Economic Briefings’ from: IATA’s Monthly Statistics publication: www.iata.org/consulting - - traffic www.iata.org/optin statistics www.iata.org/monthly Terms and Conditions for the use of this IATA Economics Report and its contents can be found here: www.iata.org/economics - terms By using this IATA Economics Report and its contents in any manner, you agree that the IATA Economics Report Terms and Conditions apply to you and agree to abide by them. If you do not accept these Terms and Conditions, do not use this report. 4 Air Passenger Market Analysis 2019 January –

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