IATA: Domestic travel now recovered, upward international trends, but hurdles still remain

Summary

• Continued strong passenger traffic demand in Apr-2023
• Domestic travel now fully recovered; international recovery gains
• Blocked airline funds threaten connectivity.
• Unruly passenger incidents in post-pandemic increase.

Continued strong passenger traffic demand in Apr-2023

International Air Transport Association (IATA) has announced continued strong passenger traffic demand in Apr-2023. Total traffic in the month (measured in revenue passenger kilometers or RPKs) rose 45.8% compared to Apr-2022. Globally, traffic is now at 90.5% of pre-COVID levels. At 81.3%, industry load factor was only 1.8 percentage points below pre-pandemic level.

Domestic travel now fully recovered; international recovery gains

The latest IATA data shows domestic traffic for Apr-2023 rose 42.6% compared to the year-ago period and has now fully recovered, posting a 2.9% increase over the Apr-2019 results.

International traffic climbed 48.0% versus Apr-2022 with all markets recording healthy growth, with carriers in the Asia-Pacific region continuing to lead the recovery. International RPKs reached 83.6% of Apr-2019 levels.

"April continued the strong traffic trend we saw in the 2023 first quarter. The easing of inflation and rising consumer confidence in most OECD countries combined with declining jet fuel prices, suggests sustained strong air travel demand and moderating cost pressures," said Willie Walsh, IATA's Director General.

Asia Pacific airlines lead Apr-2023 international recovery

The geographical variation of the recovery continued in Apr-2023.

Asia-Pacific airlines saw a 192.7% increase in Apr-2023 traffic compared to Apr-2022. Capacity climbed 145.3% and the load factor increased by 13.2 percentage points to 81.6%.

European carriers had a 22.6% traffic rise versus Apr-2022. Capacity rose 16.0%, and load factor climbed 4.5 percentage points to 83.3%, which was the second highest among the regions.

Middle Eastern airlines posted a 38.0% traffic increase compared to Apr-2022. Capacity climbed 27.8% and load factor rose 5.6 percentage points to 76.2%.

North American carriers' traffic climbed 34.8% in Apr-2023 versus the 2022 period. Capacity increased 26.5%, and load factor rose 5.2 percentage points to 83.8%, which was the highest among the regions. North American international traffic is now fully recovered, with RPKs 0.4% above Apr-2019 levels.

Latin American airlines saw a 25.8% traffic increase compared to the same month in 2022. April capacity climbed 26.4% and load factor slipped 0.4 percentage points to 83.1%.

African airlines' traffic rose 53.5% in Apr-2023 versus a year ago, the second highest among the regions. April capacity was up 50.0% and load factor climbed 1.6 percentage points to 69.8%, lowest among the regions.

Hear the latest industry views of IATA Director General Willie Walsh

You can learn more of the recovery and other key factors impacting the global airline sector in the CAPA TV interview with IATA Director General Willie Walsh during the IATA AGM in Istanbul in Jun-2023.

Some governments appear 'more keen on punitive regulation' than facilitating hassle-free travel

Heading into the Northern Hemisphere peak travel season, aircraft and airports are already full of people eager to make use of their travel freedoms. "Airlines are working hard to accommodate them with a smooth travel experience despite continuing supply chain shortages and other operational challenges," notes Mr Walsh, however, sadly, he notes, some governments "appear more keen on punitive regulation than on doing their part to enable hassle-free travel".

One example he highlights is the Dutch Government which has introduced a "high-handed" effort to slash capacity at Schiphol airport. He also observes the focus on EU-style passenger rights regulation that "is spreading like a contagion".

However, proponents of this approach miss a key fact in his viewpoint - EU 261 has not led to a reduction in delays.

"That's because penalising airlines raises airline costs but does not address delays caused by factors over which airlines have no control, such as inefficient air traffic management or staffing shortages at air navigation service providers," he says.

Blocked airline funds threaten connectivity

IATA has warned that rapidly rising levels of blocked funds are a threat to airline connectivity in the affected markets.

The industry's blocked funds have increased by 47% to USD2.27 bn in Apr-2023 from USD1.55 bn in Apr-2022.

"Airlines cannot continue to offer services in markets where they are unable to repatriate the revenues arising from their commercial activities in those markets," said Mr Walsh.

"Governments need to work with industry to resolve this situation so airlines can continue to provide the connectivity that is vital to driving economic activity and job creation," he added.

The top five countries account for 68.0% of blocked funds. These comprise:

• Nigeria (USD812.2 mn)
• Bangladesh (USD214.1 mn)
• Algeria (USD196.3 mn)
• Pakistan (USD188.2 mn)
• Lebanon USD141.2 mn)

IATA has urged governments to abide by international agreements and treaty obligations to enable airlines to repatriate these funds arising from the sale of tickets, cargo space, and other activities.

Unruly passenger incidents in post-pandemic increase

IATA has released a new analysis showing that reported unruly passenger incidents increased in 2022 compared to 2021. IATA called for more states to take the necessary authority to prosecute passengers under Montreal Protocol 2014 (MP14).

Latest figures show that there was one unruly incident reported for every 568 flights in 2022, up from one per 835 flights in 2021. The most common categorisations of incidents in 2022 were non-compliance, verbal abuse and intoxication. Physical abuse incidents remain very rare, but these had an alarming increase of 61% over 2021, occurring once every 17,200 flights.

Most Common Unruly Passenger Incident Types (per 1,000 fligts)

Source: IATA

"The increasing trend of unruly passenger incidents is worrying," explained Conrad Clifford, IATA's Deputy Director General. "Passengers and crew are entitled to a safe and hassle-free experience on board. For that, passengers must comply with crew instructions. While our professional crews are well trained to manage unruly passenger scenarios, it is unacceptable that rules in place for everyone's safety are disobeyed by a small but persistent minority of passengers. There is no excuse for not following the instructions of the crew."

Although non-compliance incidents initially fell after the mask mandates were removed on most flights, the frequency began to rise again throughout 2022 and ended the year some 37% up on 2021. The most common examples of non-compliance were:

• Smoking of cigarettes, e-cigarettes, vapes and puff devices in the cabin or lavatories;
• Failure to fasten seatbelts when instructed;
• Exceeding the carry-on baggage allowance or failing to store baggage when required;
• Consumption of own alcohol on board.

IATA says a two-pillar strategy is in place for the needed zero-tolerance approach to unruly behavior based around regulation and guidance to prevent and de-escalate incidents.

These ensure governments have the necessary legal authority to prosecute unruly passengers, regardless of their state of origin and to have a range of enforcement measures that reflect the severity of the incident. Such powers exist in the Montreal Protocol 2014 (MP14), and IATA is urging all states to ratify this as soon as possible. To date, some 45 nations comprising 33% of international passenger traffic have ratified MP14.

The guidance to prevent and de-escalate incidents will help prevent incidents through collaboration with industry partners on the ground (such as airports, bars and restaurants and duty-free shops), including for example awareness campaigns on the consequences of unruly behavior, according to IATA. Additionally, IATA is promoting the sharing of best practices, including training, for crew to de-escalate incidents when they occur. It published a new guidance document at the beginning of 2022 gathering best practices for airlines and providing practical solutions to governments on public awareness, spot fines, and fixing jurisdiction gaps.

"In the face of rising unruly incident numbers, governments and the industry are taking more serious measures to prevent unruly passenger incidents," acknowledges Mr Clifford. "States are ratifying MP14 and reviewing enforcement measures, sending a clear message of deterrence by showing that they are ready to prosecute unruly behavior."

For the industry's part, there is greater collaboration. For example, as the vast majority of intoxication incidents occur from alcohol consumed prior to the flight, the support of airport bars and restaurants to ensure the responsible consumption of alcohol is particularly important.

"No one wants to stop people having a good time, but we all have a responsibility to behave with respect for other passengers and the crew. For the sake of the majority, we make no apology for seeking to crack down on the bad behavior of a tiny number of travelers who can make a flight very uncomfortable for everyone else," said Mr Clifford.