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Analysis: Falling confidence hits African airlines' international business


The upward trend in African airlines' international passenger travel demand has softened since mid-2018, in line with falling business confidence in some of the continent's key economies.

This is according to global passenger data for March 2019 released by the International Air Transport Association (IATA).

The report shows that African airlines' demand for international passenger travel increased by 2.1% compared to March 2018. At the same time capacity increased by 1.1%, and the load factor strengthened by 0.7 of a percentage point to 71.4%.

IATA points out that more than 12.5 million passengers board flights globally each day.

Global passenger traffic results for March 2019 showed that demand rose 3.1%, compared to March 2018. This was the slowest pace for any month in nine years.

According to IATA, this was largely due to the timing of the Easter holiday period this year.

"While (global) traffic growth slowed considerably in March, we do not see the month as a bellwether for the rest of 2019," Alexandre de Juniac, IATA's director general and CEO, said in a statement.

"Nevertheless, the economic backdrop has become somewhat less favourable, with the International Monetary Fund (IMF) having recently revised its gross domestic product (GDP) outlook downward for a fourth time in the past year."

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In de Juniac's view, despite March's slowdown, the outlook for air travel remains solid.

"Global connectivity has never been better. Consumers can choose from more than 21 000 city pair combinations on more than 125 000 daily flights. And air fares continue to decline in real terms," he said.

March international passenger demand rose just 2.5% compared to March 2018, which was down from 4.5% year-over-year growth recorded in February and almost 5 percentage points below its five-year average pace.

All regions showed growth with the exception of the Middle East. Total capacity climbed 4.0%, and the load factor fell 1.2 percentage points to 80.8%.

European carriers saw March demand increase 4.7% over March 2018, down from 7.5% annual growth in February. The result partly reflects falling business confidence in the Eurozone and ongoing uncertainty about Brexit.

Middle East carriers' passenger demand fell 3.0% in March, marking a second consecutive month of declining traffic.

According to IATA, this reflects the broader structural changes in the industry which have been taking place in the region.

Globally domestic demand rose 4.1% in March, which was a deceleration from 6.2% growth recorded in February that was driven largely by developments in China and India.

Domestic capacity climbed 4.5%, and load factor dipped 0.3 percentage point to 83.4%.

In June, leaders in the aviation industry will gather in Seoul, South Korea, for the 75th Iata Annual General Meeting and World Air Transport Summit.


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