IATA: Air travel growth has halved since 2Q2018 'inflexion point'

IATA reported (05-Jul-2019) 2Q2018 represents an "inflexion point" for air travel growth. According to the association, in the two to three years before that point air travel (RPKs) grew at a fairly consistent average rate of 7% to 8% p/a. Since 2Q2018 there has been a clear downward shift in the slope with an average growth rate of less than half the previous trend, at 3.6%. Causes of the slowdown include:

• The end of the stimulus from lower fuel costs;
• The impact of the early 2018 tariffs on business confidence and travel;
• Weakness in Asia Pacific airlines' international business and the Chinese domestic market, as well as Indian domestic weakening;
• Contribution of Middle East airlines to growth in global RPKs has disappeared. Weakness in the Middle East reflects the restructuring taking place in the Gulf Cooperation Council states;
• Relative weakness in Asia compared to Europe or the Americas is consistent with the trade war weakening air travel, as the tariffs cause wider damage to business through Asia's integrated supply chains. [more - original PR]