Air passenger growth fastest for 12 years

Airlines have witnessed the biggest growth in passenger traffic since 2005 and are flying with close to a record number of filled seats, according to latest data from the International Air Transport Association (IATA). Its latest financial monitor revealed global passenger volumes shot up 7.9% during the first half of the year compared with the same period of 2016, which it said was driven by a brighter global economic backdrop and lower airfares. IATA also revealed that airline financial results during the second quarter were ‘more robust’ than earlier in the year, suggesting that the squeeze on profit margins due to higher costs and weak yields had peaked during the first quarter. Taking a sample of 24 international airlines, IATA found that post-tax profit had risen from US$5,787 million during the second quarter of 2016 to $6,408 million during the same period this year. Yields, which had been falling since 2013, started to rise slightly in July, which, said IATA, was helping to underpin investors’ confidence about airline financial performance over the year ahead. The growth of premium traffic has been strong in some markets, notably across the Pacific and within Asia, but on other routes – particularly between Europe and the Middle East – it has been weaker. Similarly, premium airfares have held up better than economy on some routes, notably the North Atlantic – but have lagged on other routes, including between Europe and Asia.