Ancillaries have gone from one-off add-ons to revenue behemoths for the airlines and now, smarting from rising fuel costs, many airlines are opting to bump up ancillaries – most recently, fees ...
GENEVA — Global passenger traffic is already gaining momentum in 2018, thanks to a robust month in November 2017 during which revenue passenger kilometres (RPKs) saw its fastest growth rate in five months.
According to IATA, RPKs in November rose 8.0% compared to November 2016, and up from a 7.3% year-over-year rise in October. Capacity (available seat kilometres or ASKs) increased by 6.3%, and load factor rose 1.2 percentage points to 80.2%.
“The airline industry is in a good place entering 2018. November’s strong demand gives the industry momentum,” said Alexandre de Juniac, IATA’s Director General and CEO. “The number of unique city-pair connections now tops 20,000. Passengers not only have more travel choices than ever, the cost of travel in real terms has never been cheaper.”
All regions showed growth, led for the third consecutive month by carriers in the Asia-Pacific region. Total capacity climbed 6.6%, and load factor increased 1.1 percentage points to 78.2%.
North American airlines’ traffic climbed 6.4% in November, with capacity rising 6.1% and load factor edging up 0.2 percentage point to 79.1%. The relatively vigorous economic backdrop is supporting outbound passenger demand, however this appears partly to be offset by a negative impact on inbound travel to the U.S. from its additional security measures.
De Juniac went on to predict that 2018 will be the fourth year in a row where the industry’s return on invested capital will exceed the cost of capital. “In sum, we begin the New Year with confidence.”
Challenges, however, remain, such as security threats and infrastructure issues. De Juniac also notes that fees and charges are a growing part of the cost base, and in many cases “airports and air traffic management struggle to keep pace with demand and technology advancements.” He suggests governments must recognize the “enormous value” that aviation provides to global economies and the world.