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Air Travel Makes a Strong Comeback, IATA Reports

Air travel is making a strong comeback. With a rise in Load Factors in May, brace yourselves for the return of crowded cabins. But, for strained airlines, that’s good news indeed. The International Air Transport Association (IATA) has just unveiled its traffic data for May 2023. Unsurprisingly, the appetite for air travel is back on the rise. 

  • Total traffic in May 2023 (measured in revenue passenger kilometers or RPKs) rose 39.1% compared to May 2022. Globally, traffic is now at 96.1% of May 2019 (pre-pandemic) levels.  
  • Domestic traffic for May rose 36.4% compared to the year-ago period. Total May 2023 domestic traffic was 5.3% above the May 2019 level. This is the second month in a row that domestic traffic has exceeded pre-pandemic levels. 
  • International traffic climbed 40.9% versus May 2022, with all markets recording strong growth, led again by Asia-Pacific carriers. International RPKs reached 90.8% of May 2019 levels, with Middle East and North American airlines exceeding pre-pandemic levels. 
  • The total industry load factor rose to 81.8%, led by North American carriers at 86.3%. 

“We saw more good news in May. Planes were full, with the average load factors reaching 81.8%. Domestic markets reported growth on pre-pandemic levels. And, heading into the busy Northern summer travel season, international demand reached 90.8% of pre-pandemic levels,” said Willie Walsh, IATA’s Director General.

A Closer Look at the Vital Passenger Load Factor

IATA has reported the current break-even load factor is around 68%, so air carriers are making good progress toward a return to profitability. 

May 2023 (% year-on-year)World share1RPKASKPLF (%-pt)2PLF (level)3
Total Market 100.0%39.1%35.0%2.4%81.8%
Africa2.1%38.6%36.7%0.9%69.9%
Asia Pacific22.1%130.4%109.5%7.0%77.3%
Europe30.8%19.1%13.5%4.0%84.8%
Latin America6.4%16.2%16.5%-0.2%81.1%
Middle East9.8%30.1%23.8%3.9%79.9%
North America28.8%14.0%13.6%0.3%86.3%
Source: IATA

1% of industry RPKs in 2022   2year-on-year change in load factor   3Load Factor Level

International Passenger Markets

  • Asia-Pacific airlines had a 156.7% increase in May 2023 traffic compared to May 2022, maintaining a very positive momentum since lifting the remaining travel restrictions in the region earlier this year. Capacity rose 136.1%, and the load factor increased 6.4 percentage points to 80.0%. 
  • European carriers posted a 19.8% traffic rise versus May 2022. Capacity climbed 14.2%, and the load factor rose 3.9 percentage points to 84.4%. 
  • Middle Eastern airlines saw a 30.8% traffic increase compared to May a year ago. Capacity climbed 25.0% and the load factor pushed up 3.6 percentage points to 80.2%. The region is leading the recovery with May traffic at 17.2% above 2019 levels. 
  • North American carriers’ traffic climbed 31.0% in May 2023 versus the 2022 period. Capacity increased 23.2%, and the load factor rose 5.1 percentage points to 85.1%, the highest among the regions. 
  • Latin American airlines had a 26.3% traffic increase compared to the same month in 2022. May capacity climbed faster– up 27.3% — and the load factor slipped 0.7 percentage points to 83.8%. The region was the only one to see capacity growth exceed traffic growth for the month. 
  • African airlines’ traffic rose 45.2% in May 2023 versus a year ago. May capacity was up 44.2%, and the load factor edged up 0.5 percentage points to 68.8%, the lowest among the regions.

Domestic Passenger Markets

May 2023 (% year-on-year)World share1   
​​
RPKASKPLF (%-pt)2PLF (Level)3
Domestic42.0%36.4%35.3%0.6%81.0%
Australia1.0%2.1%3.4%-0.9%73.6%
Brazil1.5%8.6%6.2%1.7%76.5%
China P.R.6.4%312.0%233.1%13.9%72.8%
India2.0%13.6%2.7%8.7%91.6%
Japan1.2%39.0%7.1%16.9%73.8%
US19.2%7.1%9.6%-2.0%86.9%
Source: IATA

1% of industry RPKs in 2022   2year-on-year change in load factor  3Load Factor Level

  • Brazil’s domestic traffic grew 8.6% in May compared to a year ago, and is the latest domestic market to recover fully, with traffic at 6.5% above pre-pandemic (May 2019) levels.
  • Japan’s domestic traffic surged 39.0% in May compared to a year ago, the strongest result after China and at 99.8% of pre-pandemic levels.

International vs. Domestic

May 2023 (% ch vs the same month in 2019)World share1RPKASKPLF (%-pt)2PLF (level)3
Total Market 100.0%-3.9%-3.9%0.0%81.8%
International58.0%-9.2%-11.2%1.8%82.3%
Domestic42.0%5.3%9.4%-3.1%81.0%
May 2023 (% ch vs the same month in 2019)
Source: IATA

The Bottom Line

“People need and love to fly. The strong travel demand for travel is one element supporting a return to profitability by airlines.  In 2023, we expect airlines globally to post a $9.8 billion net profit. It’s an impressive number, particularly after huge pandemic losses. But a 1.2% average net profit margin is just $2.25 per departing passenger. As a return, that is not sustainable in the long-term,” said Walsh.

“Moreover, it appears that while the pandemic has changed many things in aviation, it has not righted aviation’s famously unbalanced value chain. The latest indication came last week as European airports announced a EUR 6.4 billion ($7 billion) collective profit in 2022. In comparison, IATA estimates that European airlines made a $4.1 billion profit for the same year. We don’t begrudge any business hard-earned profits. But this does raise an interesting question. Is airport economic regulation effectively defending the public interest when a monopoly supplier (airports) can generate seemingly much healthier returns than the competitive businesses (airlines) they supply? Governments should at least take a look,” Walsh concluded.

View the IATA May Air Passenger Market Analysis (pdf)

What the Rise in Load Factor Means for Airlines and Passengers

Think of the load factor as the pulse that reflects an airline’s health. When this pulse surges beyond the break-even point, airlines start to see profits from their carefully calculated fares. It’s a sign that their efforts and meticulous strategy are finally bearing fruit.

As the percentage of the load factor grows, each increase represents another filled seat or sold cargo space. This is more than just a statistic; it’s the deciding factor that determines if a flight has managed to cover its basic operating costs. This lifeline, which we refer to as the “break-even” load factor, currently hovers around 68%. Simply put, airlines need to sell 68% of an aircraft’s capacity to recover the costs of operating the flight. 

From a passenger’s perspective, a high load-factor translates to fewer vacant seats and a bustling cabin. Yes, it might mean a bit more elbow bumping, but here’s the silver lining: when airlines hit their break-even and step into the realm of financial sustainability, they can funnel those profits back into enhancing your flight experience.

Think new aircraft, revamped cabin designs, upgraded inflight amenities—all the ingredients for a more enjoyable journey. An empty cabin, on the other hand, is a grim omen for passengers. It could suggest the route’s (or even the airline’s) days are numbered. That is, unless the airline benefits from government grants for essential air service. 

Latest Load Factor Figures Show Positive Trend in Air Travel

It’s clear the winds of change are blowing in favor of the aviation industry. But there’s a long journey ahead. The industry is navigating through uncharted territory, but with each day, there’s more hope, more optimism, and yes, more passengers filling those cabins. 

So, fasten your seat belts, folks. It will be an exhilarating ride as we soar towards a brighter future. Because, in the world of aviation, a rising load factor means one thing: air travel is finally taking off again.

More Quick Facts from IATA:

  • IATA (International Air Transport Association) represents some 300 airlines, comprising 83% of global air traffic. 
  • You can follow them at twitter.com/iata for announcements, policy positions, and other useful industry information.
  • Statistics compiled by IATA Economics using direct airline reporting complemented by estimates, including the use of FlightRadar24 data provided under license.
  • All figures are provisional and represent total reporting at the time of publication, plus estimates for missing data. Historic figures are subject to revision.
  • Domestic RPKs accounted for about 42.1% of the total market; the 6 domestic markets in this report accounted for 31.3% of global RPKs in 2022.
  • Explanation of measurement terms:
    • RPK: Revenue Passenger Kilometers measures actual passenger traffic
    • ASK: Available Seat Kilometers measures available passenger capacity
    • PLF: Passenger Load Factor is % of ASKs used.
  • IATA statistics cover international and domestic scheduled air traffic for IATA member and non-member airlines.
  • Total passenger traffic market shares by region of carriers for 2022 in terms of RPK are: Asia-Pacific 22.1%, Europe 30.8%, North America 28.8%, Middle East 9.8%, Latin America 6.4%, and Africa 2.1%.
  • Learn more about keeping flying sustainable with Fly Net Zero

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