IATA: Strong air travel growth continues in May
The International Air Transport Association (IATA) reveals continued strong growth in air travel demand according to May 2023 traffic data.
May witnessed a surge in passenger numbers, reaching levels not seen since 2019 before the onset of the pandemic. The latest data reveals that total traffic for the month, measured in revenue passenger kilometers (RPKs), increased by an impressive 39.1 percent compared to the same month last year.
Air travel has rebounded strongly in both domestic and international markets. Domestic traffic saw an impressive surge of 36.4 percent compared to the previous year, with May 2023 surpassing pre-pandemic levels by 5.3 percent. This is the second consecutive month that domestic traffic has exceeded the figures from 2019.
International travel in May 2023 soared by 40.9 percent, outpacing the same period last year. All markets, especially Asia-Pacific carriers, showed strong performance. International RPKs reached an impressive 90.8 percent of pre-pandemic levels, with Middle Eastern and North American airlines surpassing their previous records.
The total industry load factor, which measures the proportion of available seating capacity that is filled with passengers, rose to a remarkable 81.8 percent. Leading the way were North American carriers, achieving an impressive load factor of 86.3 percent.
“We saw more good news in May. Planes were full, with the average load factors reaching 81.8 percent. Domestic markets reported growth on pre-pandemic levels,” said Willie Walsh, IATA’s Director General, in a July 6 press release.
Asia-Pacific airlines saw a huge increase in traffic in May 2023, up by a remarkable 156.7 percent compared to the same month in 2022. The lifting of travel restrictions earlier this year has contributed to the positive trend. Capacity also surged by 136.1 percent, leading to a load factor of 80 percent, up by 6.4 percentage points.
European carriers registered a 19.8 percent increase in traffic compared to May 2022. The region also saw a climb in capacity by 14.2 percent, with the load factor rising by 3.9 percentage points to 84.4 percent.
Middle Eastern airlines witnessed a substantial increase in traffic, soaring by 30.8 percent compared to the previous year. Capacity also rose by a quarter percent, resulting in a load factor increase of 3.6 percentage points to 80.2 percent. Notably, the Middle East region is leading the recovery, with May traffic surpassing pre-pandemic levels by 17.2 percent.
North American carriers experienced a robust growth rate of 31 percent in May 2023 compared to the same period in 2022.
“People need and love to fly. The strong demand for travel is one element supporting a return to profitability by airlines. In 2023 we expect airlines globally to post a $9.8 billion net profit. It’s an impressive number, particularly after huge pandemic losses. But a 1.2 percent average net profit margin is just $2.25 per departing passenger. As a return, that is not sustainable in the long-term,” Walsh added.
“It appears that, while the pandemic has changed many things in aviation, it has not righted aviation’s famously unbalanced value chain. The latest indication came last week as European airports announced a EUR 6.4 billion (USD $7 billion) collective profit in 2022. In comparison, IATA estimates that European airlines made a $4.1 billion profit for the same year. We don’t begrudge any business hard-earned profits. But this does raise an interesting question. Is airport economic regulation effectively defending the public interest when a monopoly supplier (airports) can generate seemingly much healthier returns than the competitive businesses (airlines) they supply? Governments should at least take a look.”