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24-Aug-2016 12:13 PM

ACI: Passenger traffic makes solid gains amidst global economic and political uncertainties

Airports Council International (ACI) reported (23-Aug-2016) global passenger traffic grew 4.5% in Jun-2016 and 5.6% for 1H2016. Passenger traffic reported "solid gains amidst global economic and political uncertainties" while growth in air freight volumes remained "sluggish" for 1H2016. Key 1H2016 highlights:

  • International passengers: +6.0%;
  • Domestic passengers: +5.4%.
  • Regional traffic:
    • Latin America & Caribbean: +1.7%. The regional picture is mixed. Brazil’s deep recession continued to stunt air transport demand in the region’s largest economy. At the same time, Colombia and Mexico experienced robust growth across their major airport hubs. Mexican airports in particular, benefitted from the US economic recovery and expansion of routes by airlines serving major destinations in Central America;
    • Europe: +4.9%. Recovery following the global financial crisis and Euro area weakness has crisis placed air transport demand in advanced economies on a stronger footing. Continued inroads made by LCCs, coupled with the positioning of Middle Eastern and Turkish hubs for enhanced connectivity has represented "a true game changer for mature markets, such as Europe". Conversely, the UK's recent vote to exit the EU has left a cloud of uncertainty over the European single aviation market. Additionally, terrorist attacks in Brussels and Istanbul have curtailed traffic levels on key market segments and routes;
    • North America: + 4.9%. Region has experienced an important resurgence in air transport demand, particularly at many of its mega hubs, following years of consolidation and capacity discipline on the part of US airlines. Where physical capacity and infrastructure  is available, the recent upsurge in traffic is a further reminder that growth in throughput above historical trends is still possible in mature markets. The US outperformed Canada in passenger traffic growth, consistent with the macroeconomic climate differences;
    • Middle East: +8.8%. Aviation stakeholders continue to capitalise on the strategic location of airports in the Middle East. Significant capacity expansions positioned the region’s airports as aviation’s primary hubs for intercontinental travel. As the nodes that connect long-haul flights from east and west, north and south, Middle Eastern airports continue to experience double-digit growth rates;
    • Asia Pacific: +8.8%. Asia-Pacific traffic is increasing on the back of a growing middle class in key emerging markets. The significant growth of intercontinental hubs in the Asia Pacific show air transport nucleus continues to move eastward. Despite slowing economic growth in China, a move away from an investment-led economy to a consumption-driven economy will further stimulate air transport demand in the long run. India is also poised to be one of the largest aviation markets in the world in the years to come. The combination of a move towards a more liberalized market for aviation, coupled with stronger economic fundamentals, helped the country become one of the fastest-growing markets in the world;
    • Africa: -4.4%. Africa continues to face challenges despite its economic growth prospects. Security risks in Northern Africa curtailed traffic at major tourist destinations, while plummeting oil prices stunted the economic progress of such key economies. Weak overall demand across the continent, poor connectivity within the continent and a poor record of liberalising aviation represented additional obstacles to prospective growth in traffic levels.
  • Air freight: +0.5%. A "lackluster" performance of global industrial activity and trade due to China’s economic transition, the weak growth of the Japanese economy and the weaker than expected growth of the US, combined with recessions in Brazil and Russia, have all had a negative impact on air freight markets.

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