Global air passenger traffic grew 7.2% year-over-year (YOY) in October, largely recovering from the weather-related slowdown seen in September, according to IATA’s October Air Passenger Market Analysis.

North American airlines’ total market traffic was up 4.8% during the month, compared to 0.4% growth in September; domestic US traffic increased 5.3% in October, compared to a 1.2% drop the previous month. International traffic for North American carriers grew 3.7% during the month (compared to 3% in September) as international capacity in the region grew 5.2%, causing the region’s international load factor to slide 1.1 points YOY to 79.2%. Outbound international traffic continues to uphold growth movement in the sector, but inbound traffic to North America is reportedly being deterred by additional security measures inherent with traveling to the US, IATA noted.

Traffic demand worldwide, as measured in RPKs, has increased 7.7% year-to-date, exceeding the 10-year average pace of 5.5% growth, IATA said. Worldwide capacity is up 6.4% for the year so far, and the global passenger load factor is up one point YOY to 81.6%.

However, according to ITA senior economist David Oxley, the broader upward trend in seasonally adjusted traffic demand has slowed over the year. “This is principally because the degree of stimulation to demand from lower airfares has fallen,” Oxley said. “Industry-wide RPKs are trending upwards at annualized pace of around 5.5%-6% … slightly faster than the 10-year average pace. To put it in perspective, it is only around half of the trend rate during [the second half of] 2016.”

For international traffic, the Asia-Pacific region showed the largest growth in passenger traffic in October, up 10.3% YOY, driven by a solid regional economic backdrop and growing numbers of airport-pairs in operation. Latin American passenger traffic showed an 8.7% rise during the month, slowing from 10.7% in September; IATA said international passenger volumes for the region’s airlines have struggled to recover from the impacts of the September hurricanes.

In domestic traffic, India and China again showed the strongest growth, rising 20.4% and 10%, respectively, compared to a year ago. India’s October growth rate was the highest the country has seen all year. China’s surge in domestic traffic over the past couple months reflects a response to a 19% YOY rise in domestic routes being opened within China in 2017.

Passenger demand growth will likely continue in 2018, based on the global economic upturn of recent months, Oxley said. “However, given increases in airline input costs, and by contrast to the situation in recent years, we are unlikely to see a boost to demand from lower airfares,” Oxley said. “We expect this combination of factors to see passenger traffic continue to trend upwards into 2018, broadly in line with its current rate.”

Mark Nensel