RBC: an airlines sector newsOur view: The International Air Transport Association (IATA) released its May passenger traffic statistics today. Total May traffic was up 39.1% compared to 45.8% in April. Total domestic travel was up 36.4% with total international travel up 40.9% compared to May 2022. Compared to 2019 levels, total domestic travel is now 5.3% higher with total international travel still (9.2%) below those same levels. ....................................
................The total passenger load factors continue to be positive, up 2.4% in May, while steady passenger demand suggests airlines are still cautions on their pace of increasing capacity.
We believe the continued strength in passenger traffic is likely to support the commercial aftermarket. With the production of new aircraft remaining strained across supply chain disruptions, we expect the aftermarket to remain robust into 2H23. We expect many companies to utilize the calendar 2Q23 earnings season to detail their expectations for the growing passenger strength both domestically and internationally, which could further support aftermarket stocks.