- International passenger demand: Strongest growth from emerging markets, particularly the Middle East, Latin America and Africa. Capacity grew more slowly than demand supporting a near record level international load factor
- Asia-Pacific: Growth stronger previous year, although the 2011 figures were affected by the Japanese tsunami. 2012 performance in line with global average, contributing a fifth of the total industry growth. 4Q2012 boosted by a revival in the Chinese economy and strengthening momentum in Asian exports and imports;
- Europe: Traffic growth sharply down compared to 2011. With intra-EU travel stagnating, growth was generated by the long-haul performance of Eurozone airlines. Approximately 25% of growth in European airline international traffic came from airlines outside of the Eurozone (Turkey being a major contributor). European industry broke even in 2012, due to combined benefits of industry consolidation;
- North America: Growth was the slowest international passenger growth of any region. Restructuring, consolidation and tight capacity management delivered the highest load factor. Estimated regional industry profit of USD2.4 billion profit;
- Middle East: Lead international passenger growth and contributed almost a third of the total expansion in international passenger markets. 2012 growth was well ahead of the previous year, which was impacted by the Arab Spring. Capacity expansion is still behind growth, leading to improving load factors. Carriers increased the connectivity of their expanding hubs with significant increases in both network (destinations) and frequency. Improved load factor indicates that the growth is sustainable and that airlines in the region have been successful in attracting new passengers;
- Latin America: Second strongest demand growth by region, supported by rising incomes and falling unemployment in the region (particularly Brazil). Capacity expanded more slowly than demand;
- Africa: Solid year of growth, with regional economic expansion driving traffic demand. Capacity expansion was just below traffic growth. Load factor improving, but still the weakest of all regions.
Domestic passenger demand:
- Domestic air travel up 4.0% in 2012, with the Chinese and Brazilian markets the strongest performers. Chinese capacity growth outstripped demand, whereas Brazilian capacity expansion was around half the traffic increase. Chinese load factor remains strong, and higher than Brazil.
- India was the weakest domestic market, with a 2.1% contraction on 2011 levels. Total capacity growth was in line with demand. Weak economic growth was exacerbated by increasing operational costs, insufficient infrastructure, high taxes and onerous regulation. Capacity growth fell to 0.3% (from 16.2% in 2011)
- US traffic expansion slowed in 2012, with capacity just half the rate of demand growth. Domestic load factor was the strongest among the major markets. The slowdown reflects the maturity and subdued economic growth of the US market which accounts for about half of all domestic travel.
- Japanese domestic market grew 3.6%, while capacity expanded by 2.3%. The market continues to suffer from a weak economy that stalled the recovery from the 2011 earthquake and tsunami. Japan’s domestic market remains 7% smaller than pre-tsunami levels with the weakest load factor (62.0%) among the major domestic markets.
Air Cargo (domestic and international):
- Air freight markets declined for a second straight year. Air cargo has come under pressure from a slowdown in world trade growth, and shifts in the freight commodity mix. Expanding emerging economies have driven demand for bulk items carried by sea, while economic weakness in the West dampened demand for high-value consumer goods transported by air. Freight capacity grew only marginally.
- Asia-Pacific: Fall in demand outstripped capacity cuts. As the world’s major manufacturing centre, the region suffered from the slowdown in demand from Western markets. Freight load factor fell sharply hurting cargo profitability, although it remained the highest of all regions;
- Europe/North American: Both reported falls in freight demand. European carriers increased capacity, leading to declining load factors. North American carriers reduced capacity ahead of the fall in demand, but the region’s freight load factor is still the second weakest of any region;
- Latin America: Freight demand declined while capacity grew, leading to load factor falls;
- African and Middle East: Reported increasing demand due to new trade lanes and developing trade links between the two regions. The Middle East had the fastest capacity expansion of any freight region and improving load factors. Africa’s freight capacity expansion outstripping demand. African freight load factor fell and is the lowest of any region by a significant margin. [more – original PR]