Asian air traffic growth slows
Growth in demand for air travel in the Asia Pacific region continued to slow in September.
According to the latest data from IATA, Asia Pacific was the weakest region during the month, climbing just 1.7% year-on-year and dropping 0.3% compared to August 2012. This made it the only global region to experience a month-on-month decline, although tight capacity management did allow average load factors to increase one percentage point to 77.2%.
The Asia Pacific result was reflective of a global slowdown. Worldwide demand for passenger traffic in September 2012 was 4.1% above the level of the same month last year, but this has completely flattened in the second quarter, with no growth between April and August 2012. Load factors are continuing to show healthy growth however, rising to 80% in September 2012.
“A two-speed recovery is emerging into a multi-speed reality,” said Tony Tyler, IATA’s Director General & CEO. “Carriers in China, Latin America and the Middle East are growing strongly. Europe’s airlines are experiencing profitless growth in a strategy to manage high fixed costs and taxes. In Africa the challenge is to turn growth opportunities into profits. But for North American airlines the focus is on tightly managing capacity in order to optimise profits in a slow to no-growth environment. Asia Pacific carriers outside of China are a mixed bag. Robust growth in China is being tempered by faltering markets in Japan and India.
“Putting regional diversity aside, the fact that airlines are making any money at all with weak markets and high fuel prices is a tribute to their strong business performance, as evidenced by maintaining global load factors close to 80% since the start of 2012. Even with that, airlines are expected to eke out a global net profit margin of only 0.6%. It’s a tough year,” Tyler added.
International passenger demand rose 4.9% year-on-year in September, led by European airlines which continued their surprisingly strong performance with growth of 5.4% and load factors of 83.9%. North American airlines’ international traffic climbed 2.1% for the month, while load factors jumped two points to 84.6%, the highest for any region.
Middle Eastern carriers experienced by far the strongest traffic growth, with demand up 13.3% year-on-year, while Latin American airlines posted growth of 7.5% – the second highest among the regions. African airlines’ traffic climbed 4.7% year-on-year, but the region’s load factor of 71.6% remains the lowest of any region.
Domestic results for September 2012 were mixed. Global demand rose 2.6% compared to September 2011, which was a slowdown from the 5% year-on-year increase recorded in August. But September traffic rose 0.5% compared to August. Results varied strongly by country, with China and Brazil making major gains that partly were offset by weakness in India, Japan and the US.
China’s domestic travel resurgence continued with an 11.4% rise in traffic and load factors of 82.1%. Brazil also experienced strong demand growth, with traffic up 7.1% and load factors surging 5.7% points to 74%.
Japan’s domestic market declined 0.3% year-on-year in September however, and the country’s domestic market remains 10% smaller than pre-earthquake levels. Load factors softened to 67.4%. US traffic slipped 1.5% in September but load factors of 80.5% remain the highest among domestic markets. Indian domestic traffic plummeted 9.9% compared to a year ago, the worst performance for any market.