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Published on Thursday, August 9, 2018

Looming trade war could hit air travel, warns IATA

A looming trade war, soaring fuel costs and European air traffic control strikes could limit growth in air travel, according to airline body IATA.

It said air travel in June was up 7.8% over the same month last year, which was greater than the 6% increase seen in May and June.

Capacity in June was up 6.5% and load factors rose one point to 82.8%.

Demand for the first half of 2018 was up 7% year on year, but this was less than the 8.3% growth seen in the first six months of 2017.

"The first half of 2018 concluded with another month of above-trend demand growth, which is a good indicator for the peak summer travel season in the northern hemisphere," said IATA director general and CEO Alexandre de Juniac, "but the looming prospect of a global trade war is casting a long shadow.

"Additionally, rising cost inputs—fuel prices have soared by approximately 60% over the past year—are reducing the stimulus of lower fares."

European carriers saw traffic rise 6.1% in June compared to June 2017, down slightly from a 6.3% year-over-year increase recorded in May.

Capacity climbed 4.8% and load factor rose 1.1 percentage points to 86.8%, which was the highest in the world.

"Growth is supported by a relatively healthy economic backdrop. However, the possibility of air traffic control strikes could affect growth over the coming months," added IATA.

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