The International Air Transport Association (IATA) reports global traffic results for September showing a continued slowdown in the rate of traffic growth. Demand for passenger traffic was 4.1 percent above the level of September 2011.
The growth trend in air travel started to flatten in the second quarter, with no growth in the passenger market between April and August, IATA reports. The year-on-year comparisons are now also starting to show slower rates of growth.
In September, passenger travel increased 4.1 percent on a year ago, down on the 5.3 percent year-on-year growth rate in August and well below the 6 percent average growth rate seen throughout the first half of the year. Capacity increased by 3.1 percent over the year-ago period, and the load factor stood at 80 percent, up 0.7 percent points compared to September 2011.
“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.
International Passenger Markets: September international passenger demand rose 4.9 percent compared to the year-ago period, with all regions reporting traffic growth. Only Asia-Pacific carriers experienced a decline compared to August. Capacity rose 3.1 percent for the month, pushing the load factor up 1.3 percent points to 80.9 percent compared to a year ago.
North American airlines’ international traffic climbed 2.1 percent for the month, while capacity declined 0.2 percent, with the load factor reaching 84.6 percent, the highest for any region and a 2 percent point rise over September 2011.
Domestic Passenger Markets: Domestic results were mixed, IATA reports. Demand rose 2.6 percent compared to September 2011, which was a slowdown from the 5 percent year-on-year increase recorded in August. But September traffic rose 0.5 percent compared to August. Results varied strongly by country, with China and Brazil making major gains that partly were offset by weakness in India, Japan and the US.
The Bottom Line: “Tough times deliver innovation. High oil prices have turned fuel management into a fine art of conserving every last drop. Consumer demand for convenience and simplified process supported the development of a whole new way to travel facilitated by e-tickets, bar-coded boarding passes and kiosk technology. And the recent approval of the foundation standard for a New Distribution Capability (NDC) means that travelers are set to benefit from a revolution in airline retailing,” concluded Tyler.