The
The International Air Transport Association (IATA) announced global
traffic results for July showing slower growth in both air travel and
freight, but with considerable variation by region and market.
- July passenger demand in aggregate was 3.4% higher than the same month last year, compared to a 6.3% increase in June and average growth of 6.5% over the first half of the year. This slowdown in travel growth is being driven largely by the recent fall in business confidence in many economies.
-
July
freight demand was 3.2% lower than it was in the same month last
year. This is down on the 0.1% year-on-year growth rate of June. A
large part of that decline was due to a comparison with a relatively
strong July last year, but overall the trend in air freight is weak,
in line with subdued world trade growth.
“The uncertain economic outlook is having a negative impact on demand for air transport,” said Tony Tyler, IATA’s Director General and CEO. “The cargo business is 3.2% smaller than it was a year ago. And passenger markets—with the exception of Africa, China-domestic and the Middle East—saw demand fall from June to July. Overall passenger demand is still up 3.4% on the previous July. But the growth trend is clearly slowing. This, along with rising fuel prices is likely to make it a tough second half of the year.”
July 2012
vs. July 2011 |
RPK
Growth |
ASK
Growth |
PLF |
FTK
Growth |
AFTK
Growth |
International |
3.5% |
3.5% |
83.3 |
-3.3% |
-0.1% |
Domestic |
3.1% |
3.8% |
82.6 |
-2.4% |
-2.2% |
Total
Market |
3.4% |
3.6% |
83.1 |
-3.2% |
-0.6% |
YTD
2012 vs. YTD 2011 |
RPK
Growth |
ASK
Growth |
PLF |
FTK
Growth |
AFTK
Growth |
International |
6.8% |
4.7% |
78.7 |
-2.8% |
1.6% |
Domestic |
4.5% |
4.1% |
79.4 |
0.6% |
-1.1% |
Total
Market |
6.0% |
4.5% |
78.9 |
-2.4% |
1.0% |
- European carriers recorded 4.8% growth (down from 7.3% in June) on international services compared to July 2011 with an average load factor of 85.7%. That was a relatively modest slowdown from the 6.5% average growth seen during the first half of the year. Despite the recession in many European home markets, airlines from the region have been able to sustain growth on long-haul markets to regions where economic growth is stronger.
- North American airlines’ international traffic fell 2.1% year-on-year in July (after rising 1.6% in June) in part owing to decisions to trim capacity, particularly on the North Atlantic market. Compared to June (the previous month), demand contracted by 1.3%. The load factor was 86.7%, the highest among all regions.
- Asia-Pacific carriers saw demand growth of just 0.9%. This is a major slowdown from the 5.8% recorded in the June year-on-year comparison. Moreover, compared to the previous month (June 2012), demand contracted by 1.3%. European airlines appear to be benefiting more than Asia-Pacific airlines from the recently stronger trade flows from West to East, while the Middle Eastern airlines continue to offer strong competition on long-haul markets. The downward growth trend began in the second quarter of 2012 and has now continued into the third.
- Latin American airlines posted growth of 5.7%, second highest among the regions. The load factor stood at 82.0%. The region’s carriers, however, could not buck the slowdown trend, after average growth of 10.1% in the first half of the year. Recently key economies in the region, such as Brazil, have seen an interruption to economic growth, which has affected travel and freight.
- Middle East carriers experienced the strongest traffic growth at 11.2% year-over-year, although this was surpassed by a 12.4% rise in capacity. Compared to June, traffic rose just 0.1%. The region’s growth trends were impacted by Ramadan, which commenced in July this year.
- African
airlines’ traffic
climbed 5.2% year-on-year, below a 6.3% rise in capacity. Load
factor was 73.1%, by far the lowest of any region. The continent’s
airlines have seen strong growth of 10.8% on average during the
first half of the year. This has partly been a rebound from the Arab
Spring, but also reflects the relative success of many African
economies at present.
- China’s domestic market rebounded sharply from the slowdown earlier this year to post 9% demand growth in July, up from the 7.8% year-over-year growth seen in June. With capacity up 12.1%, load factor slipped to 84.1% from 86.5% last year.
- Japan’s domestic market rose just 4.2% versus the year-ago period and actually slipped 1% compared to June. Capacity rose 7.9% and load factor was the lowest for any market at 58.7%. Overall the market has contracted 4% this year and is 10% smaller than pre-earthquake levels.
- US traffic slipped 0.4% in July while capacity rose by 0.2%. Load factors dipped to 86.8% from 87.4% last year, still the highest among all the domestic markets.
- Brazil experienced the strongest growth after China, with traffic up 8.5% on a 3.0% rise in capacity. Load factor rose to 77.7% from 73.8% last July. However growth softened compared to June, declining 2.3%.
- Indian domestic
traffic fell 1.1% compared to a year ago, the worst performance for
any market, reflecting the weakening economy among other factors.
After expanding at 20%-plus rates through 2010 and early 2011, the
Indian market stopped growing at the end of 2011. July capacity rose
2.1%, dropping the load factor to 69.6% from 71.8% last year.
Air freight demand contracted 3.2% compared to July 2011 but was unchanged compared to June. Middle East carriers recorded a 16% increase in demand year-on-year but all other markets experienced declines and the small recovery seen since the end of 2011 has stagnated.
- Asia-Pacific carriers saw a 7.6% decline in demand in July compared to the previous year, the steepest decline for any region, while capacity dipped just 4.3%. Asia-Pacific carriers have experienced virtually no growth in freight traffic since the fourth quarter of 2011. European airlines had a 3.6% decline in traffic, with a 0.9% rise in capacity. Europe’s airlines have seen only a 1% rise in demand since the 2011 fourth quarter. North American airlines had a 3.6% drop in demand, matching a similar reduction in capacity. Load factor was the lowest for any region at 32.3%.
- Middle Eastern carriers’ 16% rise in traffic came on an 11% boost in capacity, helping raise load factors 2% points to 45.3%.
- Latin American airlines’ demand fell 5.6%, while capacity climbed 13.9%, resulting in a load factor of 35.2%
- African
carriers’ results
were not available but will return next month.
“It will take a team effort to ensure that Brazil’s aviation infrastructure is up for the challenge,” said Tyler. Brazilian aviation supports 940,000 jobs and 1.3% of GDP, while the connectivity provided by aviation supports Brazil’s emergence as a rising BRICS economy. But, despite aviation’s economic importance to Brazil, the country ranks 93rd for the quality of its air transport infrastructure in the World Economic Forum’s Travel and Tourism Competitiveness Index.
Last week IATA, working in partnership with the Latin American and Caribbean Air Transport Association and other aviation organizations, hosted the first Aviation Day in Brazil. “With a focus on global standards, industry and government looked at ways to cooperate to ensure that Brazilian aviation continues to be a key driver of growth, operating at ever higher levels of safety, security, efficiency and sustainability,” said Tyler. “What is true for Brazil is also true for the rest of the world. Aviation supports 56.6 million jobs and has a global economic impact of $2.2 trillion. Governments should treat this resource wisely, with tax regimes that do not kill growth, regulation that facilitates growth and world-class infrastructure that can efficiently accommodate growth.”