IATA: Air Travel Demand Continues to Improve

airlineGlobal passenger traffic results for September showed a continuation of the strong demand trend despite a slight slowdown from August, the International Air Transport Association (IATA) reports. Total revenue passenger kilometers (RPKs) rose 5.5 percent compared to September 2012. Capacity increased at a slightly lower pace at 5.3 percent over the same period. The load factor in September (80.3%) was largely in line with levels achieved in September 2012, IATA says.

“We are 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 in September, suggests that there could be a further acceleration in air travel growth before the end of the year,” said Tony Tyler, IATA’s Director General and CEO.

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International Passenger Markets

September international passenger demand was up 5.7 percent compared to the same period in 2012. An equivalent increase in capacity led to load factor remaining unchanged at 80.9 percent when compared to September 2012. All regions saw demand increase compared to a year ago.

North American airlines saw demand rise 2.3 percent over a year ago, a slowdown on the August growth of 5.1 percent. Capacity growth (3.1%) outpaced demand, pushing down load factor 0.6 percentage points to 83.9 percent. Consumer confidence and business activity has been improving throughout the third quarter. However, there could be some temporary downward pressure in the coming months due to the 17-day US government shutdown, IATA said.

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Domestic Passenger Markets

Demand for domestic travel climbed 5.1 percent in September compared to a year ago, with all markets showing year-over-year increase.  Total domestic capacity was up 4.7 percent and load factor rose 0.3 percentage points to 79.1 percent.

U.S. domestic traffic rose 1.4 percent in September, while capacity grew 1.0 percent, increasing load factor 0.3 percentage points to 81  percent, the highest among the domestic markets followed. The year-to-date traffic growth of 1.7 percent 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 October, IATA said.


The Bottom Line

“As the global economy continues to recover, aviation is doing its part by supplying the connectivity that drives global trade and commerce. Aviation can do even more if governments see it as an enabler of growth and development, rather than as a source of tax revenues. The good news is that message is getting through in some places, as shown by the announcement by the Irish Government that it will abolish its air travel tax on 1 April next year. Since the tax was introduced in January 2009, Irish passenger numbers have dropped 30 percent. The government’s decision is excellent news for air travelers and for Ireland’s travel and tourism industry,” said Tyler.

"Unfortunately, we also had disappointing news this month, as the European Commission proposed applying the Emissions Trading Scheme to all flights into and out of European airspace for the period those flights spend in EU airspace. The proposal, if agreed by the EU Parliament and the EU Council, risks nullifying all the hard work States achieved at the recent 38th Assembly of the International Civil Aviation Organization and could put aviation back in the middle of a potential trade war as non-EU States reject the attempt once again to impose the ETS unilaterally," Tyler added.

Visit www.IATA.org