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International air passenger traffic up 9.6pc

Geneva , May 2, 2012

The global air passenger traffic increased by 9.6 per cent in March compared to the same period last year, while air cargo traffic rose just 0.1 per cent during the period, according to a new report.

Announcing the global air traffic results for March, The International Air Transport Association (IATA) said the air travel capacity climbed 5 per cent, resulting in a load factor of 77.7 per cent, up 3.2 percentage points from March last year.

The global air cargo traffic rose just 0.1 per cent in March over the figure for the same month last year, said IATA citing official data.

IATA, whose statistics cover some 240 carriers, said the cargo year-on-year figure was distorted because a late Lunar New Year had caused a surge in traffic in March last year.

'The cargo demand was affected by the timing of the Chinese New Year, which occurred in January this year leading to stronger February shipments but took place in February 2011 leading to stronger March 2011 shipments and weaker year-to-year comparisons,' the IATA said in its report.

Compared to February 2012, the March air cargo demand was significantly stronger by 2.2 per cent.

Comparisons with March last year are affected by events that depressed passenger demand in 2011, including the Arab Spring, which disrupted travel in the Mena beginning in February 2011 and the earthquake and Tsunami in Japan in March 2011 that impacted air travel across the Asia-Pacific region, the airline industry body said.

IATA estimates that the year-on-year rise in air travel in March was about two percentage points higher than it would otherwise have been in the absence of these events, remarked Tony Tyler, the IATA’s director general and CEO.

'If we discount the industry’s growth by two percentage points as a result of the extraordinary events in 2011, airlines still managed an expansion in the range of 5 to 6 per cent,' he said.

'Given the prevailing economic conditions with some European states returning to recession, passenger demand is holding up well. But this is bringing little relief to the bottom line because yields are not keeping pace with the continued very high price of oil,' he added.

Oil prices have remained stubbornly above $100/barrel (Brent crude) for the past 14 months. In 2008, oil prices rose from $90/barrel in January to a peak of $147/barrel in late July. But by November, they had fallen back to less than $50/barrel.
“We have not seen such sustained high oil prices previously. Jet fuel prices have risen 8 per cent since January. Considering that fuel now accounts for 34 per cent of average operating costs, it’s an increase that hurts,” said Tyler.

According to him, the total passenger capacity rose 4.4 per cent in March compared to last year, resulting in a load factor of 78.3 per cent, up 2.4 percentage points over the year-ago period.

Freight capacity, however, climbed 1.7 per cent year-on-year, above the rate of demand, placing pressure on load factors.

On the Middle East scenario, the IATA chief said the airlines' demand jumped 20.9 per cent on a 12.4 per cent rise in capacity, propelling load factors to 78.7 per cent.

This was the largest rate of growth for any region but mostly reflected the weakness of travel last year following the Arab Spring. IATA estimates this inflated traffic gains by seven percentage points, he added.

European airlines recorded the strongest traffic growth among the major regions despite deepening recessions in parts of the continent, with demand up 8.8 per cent year-on-year, on a 4.1 per cent increase in capacity, he stated.

The load factor on this sector rose to 78.5 per cent, said Tyler. This growth is partly the result of expanding European exports to stronger Asian economies and the associated business travel, he added.

Asia-Pacific carriers also experienced healthy growth, with demand up 8.1 per cent on a 4.3 per cent rise in capacity, pushing load factors up to 76.5 per cent.

North American airlines had a 5.3 per cent rise in passenger traffic, a solid performance for the region and concurrent with better economic results from the US, particularly with increasing consumer confidence.

Latin American carriers saw traffic rise 7.7 per cent year-over-year on a 6.7 per cent rise in capacity. Passenger load factor was 77.9 per cent.

African airlines reported a 14.3 per cent rise in traffic, of which an estimated 11 percentage points was attributed to traffic suppression in March 2011 owing to the Arab Spring.

According to Tyler, both Spain and the UK have slipped into a double dip recession in recent weeks. From April this year, the UK hiked its air passenger duty (already the most expensive aviation tax in the world) by 8 per cent which is double the inflation rate.

Spain, with an economy highly dependent on tourism, is contemplating a 50 per cent increase in charges at its two main airports (Barcelona and Madrid).

“The goose that lays the golden eggs can only take so many knocks before she fails to produce. Even in the best of times, increasing the cost of connectivity dents competitiveness,' remarked Tyler.

'When the economy is weak it puts at risk aviation’s ability to create jobs and growth. And in a recession it is economic nonsense,' he added.-TradeArabia News Service



 




Tags: Iata | air traffic | international |

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