Nonetheless, airlines are doing a great job of matching capacity to demand, says Alexandre de Juniac, IATA's Director General and CEO

Both the law of large numbers after years of sharp gains in air travel demand, along with global economic concerns, tell the story of summer 2019’s airline performance, IATA’s August passenger traffic data indicates. Release/Report (PDF)

August demand (measured in total revenue passenger kilometers or “RPKs”) was up 3.8 percent compared to same month last year. Sequentially, August was above the 3.5 percent annual increase for July.

August capacity (available seat kilometers or “ASKs”) grew 3.5 percent, while load factor was pretty much flat with a 0.3 percentage point gain to 85.7 percent. Still, that’s a new monthly record, IATA noted.

"While we saw a pick-up in passenger demand in August compared to July, growth remains below the long-term trend and well-down on the roughly 8.5 percent annual growth seen over the 2016 to Q1 2018 period. This reflects the impact of economic slowdowns in some key markets, uncertainty over Brexit and the trade war between the US and China. Nonetheless, airlines are doing a great job of matching capacity to demand. With passenger load factors reaching a new high of 85.7 percent this is good for overall efficiency and passengers' individual carbon footprint," said Alexandre de Juniac, IATA's Director General and CEO.

Latin America Lags

Looking back to the spring and early summer IATA numbers, June international passenger demand increased 5.4 percent year-over-year, which was also an improvement from May 2019’s 4.6 percent annual gains.

On a regional basis, Latin America was the exception, as all regions posted gains, led by African air travel. Capacity rose 2.9 percent, and load factor added just 0.3 percent to finish the month at 85.6 percent.

Despite being poised for strong growth generally, a point that was made in Delta’s recent 20 percent stake in LATAM Airlines, Latin American carriers saw demand increase only by  2.3 percent in August compared to the same month last year; that’s down from a 4.0 percent annual growth in July.

The depressed demand was attributed to Argentina's financial and currency woes, along with tightening economic conditions in Brazil and Mexico. Meanwhile, capacity fell 0.3 percent and load factor surged 2.1 percentage points to 83.9 percent.

North American carriers' international demand grew a decent 2.5 percent versus the  year ago period, rising from a 1.4 percent increase in July. Capacity was up 1.3 percent, while load factor grew by 1.0 percentage point to 88.3 percent.

“As with the Middle East and Asia Pacific, this performance represents an improvement from July, but remains relatively soft compared to long-term norms, most likely reflecting trade tensions and slowing global demand,” IATA said.

In Europe, airlines posted 3.7 percent higher year-to-year demand in August – here too, just a slim margin over July’s 3.6 percent increase. Capacity rose 3.4 percent, and load factor climbed 0.2 percentage point to 89.0 percent, which was the highest among regions. Slowing economic growth in key markets such as the UK and Germany, as well as uncertainties and disparate business confidence outcomes are behind the softer conditions for the continent's air carriers.