Lower airfares boosting demand for air travel: IATA

Lower fares boosting demand for air travel: IATA

GENEVA — International passenger demand rose 5.6% in November 2015 compared to November 2014, with airlines in all regions recording growth, according to the latest figures from IATA. Total capacity climbed 4.1%, and load factor edged up 1.1 percentage points to 76.2%.

North American airlines’ traffic climbed 2.1% in November. While this was weaker than the year-to-date trend of 3.4%, capacity dipped 0.2%, boosting load factor 1.8 percentage points to 78.4%.

Meanwhile the healthy demand for air travel in markets around the world continued despite some softening in economic growth, in large part owing to falling fares. Data for the first 10 months of 2015 show a 5% decline in average fares in currency-adjusted terms.

“Consumers continue to benefit from lower fares, which are spurring demand. The economy benefits from the stimulus to consumer spending. And airlines are starting to achieve minimum acceptable profit levels. It’s good news all around, but as we open 2016, economic risks are mounting,” said Tony Tyler, IATA’s Director General and CEO.

Passenger demand remains strong, however the ongoing turmoil in the global financial markets and concerns over slowing economic growth in China are casting a shadow over the New Year, he said.