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IATA: Strong June recovery, but more flexibility needed

Global air passenger demand continued its strong recovery in June, with a sharp rise in traffic in Asia Pacific and ongoing demand in Europe and US, according to the International Air Transport Association (IATA).

Revenue passenger kilometers (RPKs) was up 76.2 per cent compared to June 2021, propelled by the strong recovery in international traffic. Globally, air traffic in June was 70.8 per cent of pre-crisis levels, according to the association.

International RPKs grew 229.5 per cent year-over-year in June, while domestic RPKs increased 5.2 per cent year-over-year. Domestic traffic levels were 18.6 per cent below pre-pandemic levels, while the industry-wide passenger load factor was 82.4 per cent of 2019 levels – the highest since January 2020.

“Demand for air travel remains strong. After two years of lockdowns and border restrictions people are taking advantage of the freedom to travel wherever they can,” said IATA Director General, Willie Walsh.

European carriers saw traffic increase 234.4 per cent year-over-year, second only to Asia Pacific, where traffic increased by 492 per cent. Capacity in Europe through June rose 134.5 per cent, and load factor climbed 25.8 percentage points to 86.3 per cent. International traffic within Europe was above pre-pandemic levels in seasonally adjusted terms.

However, airlines continue to struggle to meet demand – which Walsh insists is “reason to continue to show flexibility to the slot use rules”.

“The European Commission’s attempt to return to the longstanding 80-20 requirement is premature,” he added.

“[Hub] airports are unable to support their declared capacity even with the current 64 per cent slot threshold and have extended recent passenger caps until the end of October. Flexibility is still essential in support of a successful recovery.”

He also lambasted airports, Heathrow in particular, for capping passenger numbers and preventing airlines from “benefitting from the strong demand”.

According to Walsh, Heathrow’s service level performance data for the first six months of this year shows “they have failed miserably to provide basic services and missed their passenger security service target by a massive 14.3 points. Data for June has not yet been published but is expected to show the lowest level of service by the airport since records began,” he said.

Meanwhile, the sharp rise in traffic in Asia Pacific reflects recent policy decisions in countries including Japan and China to re-open travel markets. However, recovery is still in its early stages, with traffic levels still more than 70 per cent lower than pre-pandemic levels.

In China, domestic RPKs emerged in June, increasing by 70.2 per cent as the country gradually resumes air travel after a period of strict Covid-related lockdowns. Compared with June 2019, traffic levels within the country are still down 51 per cent, but this represents an increase of 20 percentage points from -71 per cent recorded in May.

Carriers in North America and Latin America continued to experience a rise in traffic, increasing carriers 168.9 per cent and 136.6 per cent, respectively.

Capacity rose 95 per cent in North America and load factor climbed 24.1 percentage points to 87.7 per cent, which was the highest among the regions. US domestic traffic remained essentially unchanged in June compared with May, increasing by just 0.3 per cent. Compared with the same month in 2019, traffic volumes eased to 8.2 per cent below the June 2019 level, from a decline of around 5 per cent in May.

Latin America saw June capacity rise 107.4 per cent and load factor increased 10.3 percentage points to 83.3 per cent. After leading in load factor for 20 consecutive months, the region slipped back to third place in June.

Middle Eastern airlines’ traffic rose 246.5 per cent in June compared to June 2021, while African airlines saw a 103.6 per cent rise in June RPKs versus a year ago as international traffic between Africa and neighboring regions edged closer to pre-pandemic levels.

Looking ahead, the association believes the re-opening of the Asia Pacific markets will provide “renewed impetus” to the global passenger recovery while inflation may begin to dampen the pent-up demand.

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