IATA reported (31-Oct-2013) global passenger traffic for Sep-2013 showed a continuation of the strong demand trend, despite a slight slowdown from Aug-2013. Capacity increased slightly slower than demand during Sep-2013, while average passenger load factor was largely in line with levels achieved in Sept-2012. IATA director general and CEO Tony Tyler said the association is “seeing a more positive environment for air travel demand, based on rising business confidence, a strong increase in export orders in September, and better performance of key emerging markets like China”. The strong growth of recent months, coupled with the continuing improvements in air travel demand, “suggests that there could be a further acceleration in air travel growth before the end of the year," said Mr Tyler.
International demand: Capacity and demand were matched in Sep-2013. All regions saw demand increase compared to a year ago.
- Asia-Pacific: Strongest demand of the three biggest regions. Downward pressure on growth during recent past months appears to have eased. Improvement in China’s third quarter GDP growth and Japan’s economy are supporting international air travel;
- Europe: Demand grew ahead of capacity. Modest economic improvements continue to support growth. Improvements in manufacturing and export activities, and the acceleration in trade growth should help support international air travel demand on European carriers for the remainder of the year;
- North America: Capacity growth outpaced demand, pushing down load factor. Consumer confidence and business activity has been improving throughout 3Q2013. However, there could be some temporary downward pressure in the coming months due to the 17-day US government shutdown;
- Middle East: Carriers continued to show the strongest year-over-year traffic growth. The trend is likely to continue, with economies such as Saudi Arabia and the UAE showing continued strong growth in non-oil producing sectors and robust increases in new export orders. Capacity expanded more than demand;
- Latin America: Demand grew ahead of capacity. While Brazil continues to suffer from rising inflation and weakening consumer demand, other economies, such as Colombia, Peru and Chile, are expanding strongly;
- Africa: Capacity was marginally ahead of demand. The strong economic growth in several emerging economies, including Ghana and Nigeria, as well as increased trade activity, is supporting the demand growth.
Domestic passenger markets: Demand for domestic travel climbed more than total domestic capacity.
- US: load factor is the highest among the domestic markets. Year-to-date traffic growth of 1.7% is an improvement on 2012. While the demand environment is broadly optimistic, with second quarter economic growth rates expected to be maintained in the third quarter, the US government shutdown potentially could have a negative impact on air travel volumes in Oct-2013;
- China: Domestic traffic up 10.6%, confirming the robust trend in air travel. Indicators of manufacturing and services activity have improved in recent months, following a period of weakness in the second quarter. Capacity growth outpaced demand, leading to an easing of load factors;
- Japan: Domestic traffic expanded more than capacity, with the Japanese economy continuing to show signs of improvement, with business activity and trade growth expanding solidly;
- Brazil: Capacity reductions and sluggish demand characterised the month, with load factor climbing 2.3 percentage points. This should help ease some of the downward pressure on profitability from weakening economic conditions. Brazil is the only major domestic market to see a year-to-date traffic decline, with a significant fall in capacity;
- India: Capacity growth lagged well behind double-digit demand expansion, pushing up load factor 6.6 percentage points. The improvement over recent months is inconsistent with continued weakness in the economy and could be reflecting fare discounting;
- Russia: Demand climbed despite indicators showing a slowdown in economic activity;
- Australia: Domestic traffic rose ahead of capacity. The year-to-date growth has slowed compared to 2012. [more - original PR]