Air passenger traffic climbs again
Global air passenger traffic climbed 7.6% in March 2012, according to the latest data from the International Air Transport Association (IATA).
Comparisons with March 2011 are affected however, by the Arab Spring and Japanese disasters, which impacted air travel across North Africa, the Middle East and Asia Pacific. IATA estimated that without these events, passenger traffic would be up 5-6% year-on-year.
“If we discount the industry’s growth by two percentage points as a result of the extraordinary events in 2011, airlines still managed an expansion in the range of 5-6%. Given the prevailing economic conditions with some European states returning to recession, passenger demand is holding up well. But this is bringing little relief to the bottom line because yields are not keeping pace with the continued very high price of oil,” said Tony Tyler, IATA’s Director General & CEO.
Oil prices have remained above US$100 per barrel for the past 14 months and jet fuel prices have risen 8% since January. “Considering that fuel now accounts for 34% of average operating costs, it’s an increase that hurts,” said Tyler.
Total passenger capacity rose 4.4% compared to March 2011, resulting in a load factor of 78.3%, up 2.4 percentage points over the same month last year.
International air travel rose 9.6% year-on-year in March, while capacity climbed 5%, resulting in a load factor of 77.7%, up 3.2 percentage points from March 2011.
Airlines in the Asia Pacific region experienced healthy growth in March 2012, with demand up 8.1% on a 4.3% rise in capacity, pushing load factors up to 76.5%. Year-on-year comparisons were impacted by the 11 March Japanese earthquake and tsunami, which are estimated to have reduced 2011 demand by 3%, exaggerating year-over-year growth by a similar amount.
European airlines recorded the strongest traffic growth among the major regions despite the continent’s economic difficulties, with demand up 8.8% year-on-year, on a 4.1% increase in capacity. Load factor rose to 78.5%. IATA said this growth is partly the result of expanding European exports to stronger Asian economies and the associated business travel.
North American airlines experienced a 5.3% rise in passenger traffic, on a 0.9% rise in capacity, pushing load factors up to 80.3% – the highest of all the regions.
Middle East airlines’ demand jumped 20.9% on a 12.4% rise in capacity, propelling load factors to 78.7%. This was the largest rate of growth for any region but mostly reflects the weakness of travel last year following the Arab Spring. IATA estimates this inflated traffic gains by seven percentage points.
Latin American carriers experienced the second-slowest demand growth among the regions, but traffic still rose 7.7% year-over-year on a 6.7% rise in capacity. Passenger load factor was 77.9%.
Finally African airlines reported a 14.3% rise in traffic, of which an estimated 11 percentage points was attributed to traffic suppression in March 2011 owing to the Arab Spring. Capacity rose 10.7%, resulting in a load factor of 64.8%, which although an improvement year-over-year, was by far the lowest among the regions.
Domestic markets grew at less than half the rate of international markets, just 4.5%, due in part to slower growth in India.
Japan experienced the strongest traffic growth, up 15.5% year-on-year. This however, reflects the impact of last year’s natural disasters. March 2011 traffic was down 27% on March 2010. While the market has significantly recovered, domestic traffic levels remain 10% below those of the pre-crisis period. Capacity was 2.6% below last year’s levels and load factors averaged 64.8%, the lowest of any domestic market.
China’s domestic traffic continued on its strong growth path with an expansion of 10.1% but this was exceeded by an 11.8% rise in capacity, with load factors slipping to 80.5%.
Domestic traffic in the US rose 1% in March, but capacity contracted 0.7%, pushing load factors to 84.3%, the highest of any market.
Indian traffic rose 4% year-over-year, much slower than the last few months, reflecting the wider economic slowdown. Capacity climbed 4.8% and load factor was 72.2%.
“The goose that lays the golden eggs can only take so many knocks before she fails to produce. Even in the best of times, increasing the cost of connectivity dents competitiveness. When the economy is weak it puts at risk aviation’s ability to create jobs and growth. And in a recession it is economic nonsense,” Tyler concluded.