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Air travel maintains strong growth.
Friday, 13th December 2013
Source : International Air Transport Association

The IATA announced global passenger traffic results for October showing a moderate acceleration of the robust demand trend of the last few months.

Total revenue passenger kilometers (RPKs) rose 6.6% compared to October 2012, an improvement over the September increase of 5.2%. A capacity increase of 6.5% meant that load factor was virtually flat at 78.9%.
“October traffic results reinforce expectations for a strong fourth quarter traffic performance in line with rising business confidence and better economic performance in the major advanced economies,” said Tony Tyler, IATA’s Director General and CEO.

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International Passenger Markets
October international passenger demand was up 6.9% compared to the year-ago period with airlines in all regions recording growth. Capacity rose 6.6% and load factor climbed 0.2 percentage points to 78.4%.

  • Asia-Pacific carriers continued their solid performance of recent months with a 7.8% rise in October compared to October 2012, the strongest performance among the three biggest regions. Current growth rates are an improvement compared to the first half of 2013, supported by better performance of major economies such as China and Japan. Furthermore, international trade volumes in emerging Asian economies rebounded in September adding support for business travel. With capacity up 7.1% versus October 2012, load factor rose 0.5 percentage points to 76.4%.
  • European carriers’ international traffic climbed 5.4% in October compared to the year-ago period, on a 4.6% rise in capacity, pushing load factor up 0.6 percentage points to 81.0%. The Eurozone economy stopped contracting in the second quarter and has continued the modest recovery in the second half of 2013. The pace of economic growth has slowed, however, from 0.3% in the second quarter to just 0.1% in the third, as the recovery remains fragile and patchy.
  • North American airlines saw demand rise 3.6% compared to October a year ago, an improvement on September growth of 2.3%. Recent indications suggest a more supportive business environment, with consumer confidence and business activity showing improvement throughout the third quarter. But rates of manufacturing and service sector growth are still well down on growth seen at the beginning of the year, suggesting international demand could remain close to year-to-date rates (2.8%) for the rest of 2013. Capacity rose 4.6%, resulting in a 0.8 percentage point decline in load factor to 81.4%.
  • Middle East carriers had by far the strongest year-over-year traffic growth in October at 14.0%. Capacity kept pace, however, rising 13.9%, and load factor stayed flat compared to the year-ago period at 75.5%. Airlines in the region have benefitted from strong demand for business-related premium travel, particularly to developing markets such as Africa. Solid performance of key economies like Saudi Arabia and the United Arab Emirates has also supported strong expansion in business and leisure travel.
  • Latin American airlines saw demand climb 8.3% in October buoyed by solid trade growth and business related travel. Economic expansion in Colombia, Peru and Chile is supporting demand for international travel, offsetting continuing weakness in Brazil. Capacity rose 4.6% and load factor jumped 2.7 percentage points to 79.7%.
  • African airlines’ traffic climbed 3.5% compared to October 2012, the slowest rate of growth for any region and well below year-to-date expansion of 6.4%. Capacity rose 8.7%, resulting in a 3.3 percentage point drop in load factor to 66.1%, the lowest load factor for any region. Intense competition on major trunk routes and market volatility may have affected volumes in October.
Domestic Passenger Markets
Domestic travel demand rose 6.0% in October compared to a year-ago, largely driven by strong traffic growth in developing markets. Total domestic capacity was up 6.3%, however, pushing load down 0.2 percentage points to 79.8%.
  • US domestic traffic rose 2.8% in October compared to October 2012, above the year-to-date growth of 1.7%, suggesting domestic traffic was not seriously impacted by the federal government shutdown that month. Capacity, however, rose 4.7% and load factor dropped 1.6 percentage points to 82.8%, which still was the highest for any market.
  • China’s domestic traffic jumped 12.3% compared to the year ago period, the highest for any market and consistent with robust economic activity in the country. October capacity rose 11.7% and load factor grew 0.4 percentage points to 80.9%.
  • India’s airlines also experienced double-digit growth as traffic leapt 11.5% in October compared to a year ago. Airlines have experienced substantial volatility in traffic and it is likely that the increase is a result of unusually low volumes a year ago rather than growth in October. Capacity rose 9.4% and load factor climbed 1.4 percentage points to 72.1%.
  • Japan traffic climbed 5.1% in October year-on-year, supported by sustained increases in business activity and trade growth. With capacity up 4.1% load factor rose 0.6 percentage points to 68.8%, which still was the lowest among the regions.
  • Brazil’s airlines posted domestic traffic growth of 5.5%, a significant improvement compared to the September result of 0.4%. Capacity was nearly flat with the result that load factor climbed 3.9 percentage points to 77.9%, the steepest rise for any market.
  • Russia was the third market to experience a double-digit increase in demand, with traffic up 11.4% in October compared to October 2012. The exuberant result was in contrast to indicators showing a slowdown in economic activity, with weakness in consumer demand and trade activity. Capacity rose 12.5%, dropping load factor 0.7 percentage points to 72.7%.
  • Australian domestic traffic rose 1.2% in October compared to last year, similar to September year-on-year growth of 1.4%. While weaker domestic demand and sluggishness in growth of major trade partners like China constrained air travel, improvements in business and consumer confidence linked to interest rate cuts suggest a more positive economic outlook. Capacity rose 3.5%, and load factor declined 1.7 percentage points to 77.4%.
The Bottom Line:

“In 2013, the airline industry will carry more than 3 billion passengers in a year for the first time. And on 1 January 2014, we will celebrate a century of scheduled commercial aviation. These twin landmarks provide an opportunity to reflect on the enormous contribution aviation makes to all of our lives. That contribution comes not from the fees and taxes with which governments continue to burden aviation and air travelers, but rather from the ability to bring people together, connect people to markets and to create opportunities for greater understanding among cultures,” said Tyler.
View full October air passenger results (pdf)

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