Indian domestic traffic plummets
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Domestic air traffic falls 9.9% in September 2012 becoming the worst performer for any market…
India’s domestic air traffic plummeted 9.9% in September 2012 as compared to a year ago. The country showed the worst performance for any market, reflecting the slowing economy and capacity reductions that have suppressed domestic travel. According to the data released by the International Air Transport Association (IATA), last month, capacity fell 5.9%, while the load factors were the lowest of any market – down 2.9% points to 64.9%.
Globally, demand on domestic markets rose 2.6% compared to September 2011, which was a slowdown from the 5% year-on-year increase recorded in August. September traffic rose 0.5% compared to August, however results varied strongly by country, with China and Brazil making major gains of 11.4% and 7.1% respectively. India, Japan and US slipped into the negatives at 9.9%, 0.3% and 1.5% respectively.
International passenger demand rose 4.9% compared to the year-ago period, with all regions reporting traffic growth. Only Asia-Pacific carriers experienced a decline compared to August. The European market showed strong performance with 5.4% growth on international services compared to September 2011, while demand in Asia-Pacific rose just 1.7% year-on-year. Middle East carriers experienced by far the strongest traffic growth with demand up 13.3% year-on-year.
“A ‘two-speed’ recovery is emerging into a ‘multi-speed’ reality. 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 optimize 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,” said Tony Tyler, IATA’s Director General and CEO.
“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,” said Tyler.