The airline industry starts to 2019 in force

L’industrie aérienne démarre 2019 en force

Photo: Michaël Monnier Duty
In January, passenger traffic globally was up by 6.5 % compared to the same month of 2018.

The airline industry is experiencing a strong start to the year. The growth in demand is at the rendez-vous, continuing an upward trend for the ten-year-old. But signs of weakening appear, here and there.

In January, passenger traffic globally was up by 6.5 % compared to the same month of 2018. Capacity increased 6.4 %, it has resulted in an improvement of 0.1 point in the average coefficient of occupation, which amounted to 79,6 %.

The data come from the international air transport Association (IATA), which represents approximately 290 airlines claiming 82 % of the global market. “2019 has started on a positive note, passenger demand in line with the trend of the last ten years. However, market signals are mixed, with signs of weakening of business confidence in the developed economies and a picture is more nuanced in developing countries “, commented Alexandre de Juniac, director general and ceo of IATA.

By region, passenger traffic grew by 8.5% in Asia-Pacific, 7.4% in Europe, 5.2% in North America, 4.8 % in Latin America and of 3.7% in Africa. Overall, the growth amounted to 6 % for international passenger traffic, up 7.3 % for the domestic market. IATA notes, however, in its January reading to a moderation of the pace in Europe, ” probably reflecting the uncertainties as to the economic situation of the region, in particular the lack of clarity on the Brexit “. In the United States, the volume of international passengers is based on sound economic conditions, but the signals issued by the traffic inside point to a weakening. “In terms adjusted for seasonal variations, the upward trend has moderated since mid-2018, may be because of concerns about the economic outlook and trade tensions,” says the Association.

In its projections to 2019 published towards the end of December, IATA was expecting a return on the capital invested above the cost of capital for a fifth year in a row. The projections showed a net profit of whole of 35.5 billion US $in 2019, against $ 32.3 billion expected this year, extending to ten years consecutive to the sequence of profitability. IATA took care to add that this performance translates into a net profit margin just above 4 %, a “modest” total of US $7.75 per passenger. The stronger results would come from the north american carriers, with a budgeted profit of 16.77 US $per passenger and a margin of 6 %.