International Air Traffic Was Strong in January, IATA Reports

airlineThe International Air Transport Association (IATA) announced global passenger traffic results for January showing a strong increase in demand.

Total revenue passenger kilometers (RPKs) rose 8.0 percent compared to January 2013, an improvement over the December 2013 growth of 6.8 percent and the full year 2013 growth of 5.2 percent. January capacity increased 6.7 percent, pushing load factor up 0.9 percentage points to 78.1 percent.

“2014 is off to a strong start, with travel demand accelerating over the healthy results achieved in 2013, in line with stronger growth in advanced economies and emerging market regions,” said Tony Tyler, IATA’s director general and CEO.

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International Passenger Markets

January international passenger demand was up 7.8 percent compared to the same period a year ago with all airlines in all regions recording growth. Capacity rose 6.8 percent and load factor climbed 0.7 percentage points to 78.3 percent.

Middle East carriers’ demand soared 18.1 percent in January, the strongest of any region worldwide. Capacity climbed 15 percent versus the same month in 2013. Load factor was up 2.2 percentage points to 81.1 percent, also the highest for any region.

IATA said the Middle East carriers are benefitting from the strength of regional economies and solid growth in business-related premium travel -- supported by the performance of internationally trading industries and key economies, such as Saudi Arabia and the United Arab Emirates.

Asian-Pacific carriers’ traffic rose 8 percent compared to the year-ago period. However, that timing was distorted to some extent by the Lunar New Year timing, a month earlier than in 2013.

So comparisons with December traffic for Asian-Pacific carriers suggest a continuation of the slower growth seen toward the end of 2013, likely in line with signs of a slowdown in the Chinese economy, IATA said. Capacity for the Asian-Pacific group climbed 7.5 percent year-over-year and load factor rose 0.4 percentage points to 78.2 percent.

Demand was up 6.4 percent in January versus January 2013 for European airlines. IATA credited modest economic improvements in the Eurozone since the second quarter 2013 and rising consumer and business confidence as reasons for the growth.

Additionally, IATA said the European services sector has been indicating expansion and Eurozone job losses have stabilized. European capacity rose 5.9 percent and load factor climbed .4 percentage points to 77.2 percent.

North American airlines experienced a 3.5 percent rise in international traffic compared to January a year ago. IATA said rising consumer spending and employment growth are expected to support continued demand growth in the coming months.

North American capacity rose 2.5% pushing load factor up .8 percentage points to 80.4 percent, third highest among regions.

Latin American airlines’ traffic rose 4.4 percent in January compared with the same month a year ago. This was well below the 8.1 percent increase achieved for full year 2013. Despite the dip, the outlook for continued demand growth remains broadly positive, IATA said.

IATA cited such strong economies as those in Colombia, Peru and Chile, plus demand anticipated for the 2014 FIFA World Cup in Brazil as positive factors. Capacity for Latin American carriers rose 2 percent and load factor jumped 1.8 percentage points to 80.8 percent.

African airlines’ traffic climbed 2.7 percent compared to January 2013, the slowest rate of growth for any region, while capacity rose 4 percent, resulting in a .9 percentage point drop in load factor to 68.9 percent, the lowest load factor for any region.

In its press release, IATA said “results could partly reflect adverse developments in some parts of the continent, including the slowdown of the South African economy as well as some moderation in trade volumes.”

Domestic Passenger Markets

Domestic travel demand rose 8.2 percent in January compared to a year-ago, with several markets reporting double-digit growth. Total domestic capacity was up 6.5 percent, and load factor rose 1.2 percentage points to 77.7 percent.

In the U.S. market, growth was 2.1 percent in January 2014 versus the same period a year ago; that growth is indicated by RPK or revenue passenger kilometers, a measure of traffic.

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Passenger capacity growth was very slight -- .2 percent -- based on ASK or available seat kilometers. U.S. load factor for domestic flights was 80.9 percent.

Three top performing markets for January 2014 were China, Brazil and Russia with domestic traffic in those nations expanding at double-digit rates. China’s domestic demand soared 20.1 percent, compared to the year-ago period, the highest for any market, while Brazil’s airlines posted the highest load factors at 81.5 percent.

The Bottom Line

"The second century of commercial aviation has begun on a positive note, with air traffic demand rising in line with generally positive economic indicators,” said IATA’s Tyler. “While this is in line with an improved overall outlook for 2014, aviation remains highly vulnerable to external shocks. Rising geopolitical tensions around the world have the potential to cast shadows on this optimistic outlook."

To read the full report, visit www.iata.org/whatwedo/Documents/economics/passenger-analysis-jan-2014.pdf

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