Asian air traffic continues to struggle

International air passenger traffic in the Asia Pacific region increased just 1.4% in October 2012, according to the latest data from IATA.

Asian airlines added 2.3% more capacity in October

The growth rate for the region’s carriers was unchanged from September’s performance, with strong competition on long-haul markets limiting growth for Asia’s airlines, and reductions in international seat capacity by Indian airlines contributing to the weaker growth.

The Asian result reflected a continuing global slowdown in air traffic. Across the world last month, passenger demand rose just 2.8% compared to October 2011, but declined 0.5% compared to September – a result impacted by Hurricane Sandy. Seat capacity increased 2.3% allowing load factor to creep up 0.4 percentage points to 78.8%.

“Slowing world trade and weak business confidence are affecting demand for air travel, while Hurricane Sandy delivered a concentrated punch to US domestic and North Atlantic travel. And its impact was felt globally,” said Tony Tyler, IATA’s Director General & CEO. “Airlines are managing the softer passenger demand environment by limiting capacity growth to keep load factors high. But the rapid decline in freight traffic is outrunning the industry’s ability to respond.”

In terms of Asia’s domestic passenger markets, weakness in India and Japan was in stark contrast to the strong growth experienced in China. China’s domestic passenger traffic surged 7.5% compared to October 2011. An 11% expansion of capacity meant that load factor dropped 2.6 percentage points to 80.6%, but this was still among the highest for any domestic market.

Japan’s domestic market however, continued to struggle. Passenger demand fell 0.5% year-on-year and load factor was the lowest for any market at 66.8%. In India the situation is even more dire, with domestic traffic plunging 12.4% in October compared to a year ago – the worst performance for any market, and reflective of severe problems in the country’s domestic airline industry. Capacity declined 7.3% and load factor fell 4.1 percentage points to 70.1%.

By Mark Elliott, 30 November 2012, Friday 1:07 AM