Former Air France KLM CEO and current head of trade association IATA, the International Air Transport Association, explains slower growth in airline passenger travel,
The slowdown was “likely owing to the anticipated reduced demand boost from lower airfares due to rising airline cost pressures,” IATA DG and CEO Alexandre de Juniac said, adding that “heightened uncertainty about trade policies and mounting protectionist policies may also be having an impact.”
IATA data showed that worldwide growth in airline passenger numbers was at an 8 month low in September. This is because of a reduction in the increase that was driven by lower fares. In other words it’s because of higher fares.
I think “anticipated reduced demand boost from lower airfares due to rising airline cost pressures” may be my favorite phrase ever, and is definitely the best way anyone has ever said that “when airfares go up people scale back on the trips they would have taken.”
While United Airlines President Scott Kirby says demand for air travel is inelastic and that fares in the U.S. should be twice as high as they are today, airline industry data suggests that travelers pull back as fares begin to rise. In other news the sky is blue.