Global airline passenger traffic growth remained strong in April, with traffic demand up 6.2% year-over-year as capacity rose 5.9%, leading to an 82.3% passenger load factor—the third record-setting monthly load factor in a row, according to IATA’s Air Passenger Market analysis released May 31.

The April growth rate was not as high as March’s (9.7%, the fastest pace in a year) largely related to the timing of the Easter holiday in 2017, which affected April 2017 traffic. Nonetheless IATA noted seasonally adjusted (SA) traffic has strengthened to an upward trend during the first four months of 2018 while the global economic backdrop remains broadly supportive of passenger demand.

Year-to-date, global passenger traffic demand is up 7%, compared to 7.9% YOY growth at the same point last year. IATA expects 2018 to be another year of above-trend growth but forecasts a moderate slowdown in demand growth compared to 2017. Full-year 2017 traffic demand growth came to 7.6%, well-ahead of the 5.5% 10-year average pace.

“Demand for air transport continues to be above the long-term trend,” IATA DG and CEO Alexandre de Juniac said. “However, increases in airline cost inputs, notably fuel prices [also labor costs in some cases], means that we are unlikely to see increased stimulation from lower fares in 2018 compared to previous years.”

“While hedging practices differ throughout the industry, oil prices have rallied over recent months,” IATA senior economist David Oxley said. “[They] are currently around 50% higher in US dollar terms than they were a year ago.”

In international passenger traffic, Asia Pacific carriers had the month’s strongest growth, increasing 7.6% YOY, followed by Latin American carriers, for which traffic grew 6.4%. International passenger traffic on African carriers also had a significant 5.1% rise in April, helped by rising economic activity in the both Nigeria and South Africa, the region’s largest economies.

In domestic traffic, a 5.3% rise among US carriers—up from 4.8% in March—boosted overall global domestic traffic to 8.5% growth in April. The strongest growth, with double-digit annual growth now for 44 months in a row, continues to be seen in India, up 26.4 YOY in April.

China’s domestic passenger traffic also grew significantly in April, up 15.5% YOY, ahead of the country’s 11.9% five-year average pace. While trade tensions with the US may “pose risks to economic activity, the bigger picture is that the service sector in China remains in good health,” Oxley said. “In fact, the expected rebalancing in the economy away from exports and investments towards consumer spending is likely to continue to bolster air passenger demand growth in both the short and the long run.”

Mark Nensel