by Mark Albert
Strong demand powered air travel to a 12-year high for the first half of 2017, a shot in the arm for the airline industry but also foreshadowing the fact that lower fares are “likely to fade,” according to a new analysis of traffic data.
The International Air Transport Association, a Geneva-based trade group that represents 275 airlines that carry 83% of global air traffic, issued its semi-annual release of results for the first and second quarters.
It showed air traffic grew 7.9% from January through June, the strongest growth in a dozen years, while the passenger load factor—the share of seats that fly full—rose to a record high of 80.7%.
“A brighter economic picture and lower airfares are keeping demand for travel strong,” said Alexandre de Juniac, IATA’s Director General and CEO.
But de Juniac warned that years of historically low fares would soon be grounded.
“[A]s 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,” de Juniac concluded.
Lower Fares Fuel Strong Demand
In June, passenger demand on the world’s airlines rose by 7.8% compared to June 2016, IATA said.
Demand was also up slightly in June from the 7.7% growth in May of this year.
Africa saw the strongest surge in traffic, with airlines there reporting 9.9% growth in June compared to the same month last year.
Latin America came in a close second at 9.7% higher traffic, with Asia-Pacific right behind at 9.1%.