Terrorism Slows Global Air Travel Demand Growth in June

Global air travel demand increased 5.2 percent year over year in June, showing slower growth compared with earlier this year, according to the International Air Transport Association.

IATA director general and CEO Tony Tyler noted "the fragile and uncertain economic backdrop, political shocks and a wave of terrorist attacks" as factors in the demand growth slowdown. Global international air travel capacity, meanwhile, increased 5.6 percent in June, dragging down load factor by 0.3 percentage points to 80.7 percent.

Effect of Repeated Attacks
International air travel demand in Europe, which has bore the brunt of the recent terrorist attacks, increased 2.1 percent year over year, the smallest increase among global regions, according to IATA. Capacity increased 3.4 percent, and the region's load factor declined 1.1 percentage points to 83.3 percent.

"While demand tends to recover reasonably quickly after such events, the repeated nature of the attacks may have a more lasting impact," according to IATA.

Terrorism also was a possible factor in a slowdown of demand growth in the Asia/Pacific region, IATA reported. International air demand there in June was up 8.2 percent year over year, but most of that came from growth earlier in the year, a possible "sign of Asian passengers being put off travel by terrorism in Europe," according to the association. Asia/Pacific capacity increased 7.3 percent, and load factor was up 0.6 percentage points to 78.2 percent.

In North America, international air travel demand in June increased 4 percent year over year, showing improvement from the previous month. Capacity rose 4.7 percent, leading to a 0.6 percentage point drop in load factor to 84.3 percent.

Demand growth also has improved in Latin America, where it was up 8.8 percent year over year. Capacity increased 5.2 percent, and the region's load factor rose 2.7 percentage points to 82.4 percent.

Capacity outpaced demand in both the Middle East and Africa. In Africa, "the strong upward trend in demand that began in the second half of 2015 has paused," IATA reported, with demand up 4.7 percent and capacity up 7.4 percent. The region's load factor declined 1.7 percentage points to 64.4 percent. Demand growth in June for Middle Eastern carriers moderated to 7.5 percent in June as capacity increased 14.3 percent, dropping load factor 4.4 percentage points to 69.9 percent. The timing of Ramadan was a possible factor in the slowdown, according to IATA.

Demand was up among all major domestic air travel markets in June except Brazil, where domestic demand declined 6.5 percent, and demand growth outpaced capacity growth in most markets. In the United States, domestic air travel demand increased 4.5 percent, higher than the nation's 4.3 percent growth in domestic air capacity. Domestic demand growth was strongest in India, where it increased 23.3 percent "propelled by strong growth in real consumer spending as well as the fact that airlines are adding airport pairs and frequencies," IATA reported.