Russia Ukraine Crisis: Domestic Russian Air Travel Grows As Conflict, Low Fares Keep Tourists At Home

Air travel remained flat globally in July, but the overall data masked solid growth in regional markets, which offset modest weakness in places like China, which is experiencing slowing growth, and Europe, itself fighting a return to recession.

According to the International Air Transport Association's Director General and CEO Tony Tyler:

July was another strong month of growth for air travel. People are connecting by air in ever greater numbers. That’s true across all regions. Despite the various economic challenges, the outlook for passenger travel remains broadly positive. The overall sluggishness at the beginning of the year appears to be behind us with growth in China and other emerging economies offsetting recent deterioration in the Eurozone.

Going forward, the group warned that there are some real and present challenges for the airline industry despite its July results. Tyler cautioned that the Ebola outbreak in West Africa, weakness in the euro zone and open warfare in the Mideast all could hurt air travel.

Here are some highlights from the report:

Air travel volumes rose by a solid 5.3% in July year-on-year, a slight pickup on June when revenue passenger kilometers were up 4.6% vs. a year ago. The outlook for air travel remains broadly positive, despite recent adverse developments in some regions.

Business activity at the start of Q3 is in line with the 4-month high reached in June. In addition, demand conditions are picking up in emerging markets like China, which could help offset some of the recent weakness in the Eurozone recovery. Current growth in air travel volumes should be at least sustained in the months ahead.

Despite the Russia-Ukraine crisis, domestic revenue passenger kilometers (a main traffic gauge) in Russia have increased at the strongest rate among markets in July, rising 9.9% year-on-year. [Though] the crisis has caused a slowdown in economic growth in Russia [...] airlines have been able to maintain demand for domestic air travel through significant reductions in fares.