ETW Staff– Mumbai
The International Air Transport Association (IATA) has announced full-year traffic results for 2013 showing a 5.2 per cent increase in passenger demand compared to 2012. The 2013 performance aligns with the average annual growth rate of the past 30 years. Capacity rose 4.8 per cent and load factor averaged 79.5 per cent up 0.4 per cent points over 2012.
Demand in international markets (5.4 per cent) expanded at a slightly faster rate than domestic travel (4.9 per cent). Strongest overall growth (domestic and international combined) was recorded by carriers in the Middle East (11.4 per cent) followed by Asia-Pacific (7.1 per cent), Latin America (6.3 per cent) and Africa (5.2 per cent). The slowest growth was in the developed markets of North America (2.3 per cent) and Europe (3.8 per cent).
Tony Tyler, director general and CEO, IATA, said, “We saw healthy demand growth in 2013 despite the very difficult economic environment. There was a clear improvement trend over the course of the year which bodes well for 2014. Last year’s demand performance demonstrates the essential and growing role that aviation-enabled connectivity plays in our world. And with system-wide load factors at 79.5 per cent it is also clear that airlines are continuing to drive efficiencies to an ever-higher level.”
International Passenger Demand
International passenger demand grew by 5.4 per cent in 2013 compared to 2012 with all regions reporting growth. Capacity rose 4.9 per cent, boosting load factor to 79.3 per cent, up 0.4 percentage points over 2012.
Asia-Pacific airlines’ traffic rose 5.3 per cent in 2013, the highest increase among the three major regions and slightly above 2012 annual growth of 5.2 per cent. After a slow start, carriers in the region saw a pick-up in demand in the third quarter, supported by stronger performance of major economies such as China and Japan. Capacity expansion of 5.2per cent meant load factor was virtually flat at 77.7 per cent.
European carriers saw traffic rise 3.8 per cent in 2013 compared to 2012, a slowdown compared to annual growth of 5.3per cent in 2012. Capacity rose 2.8per cent and load factor was 81 per cent, second highest among the regions and a 0.5 percentage point rise over 2012. Modest economic improvements in the Eurozone since the second quarter and rising consumer and business confidence are providing a stronger demand base for international travel; and after weakness in previous months, job losses in the Eurozone stabilised in December.
North American carriers reported the slowest passenger growth of any region at three per cent compared to 2012 but an improvement over 2012 growth of 1.3 per cent. With capacity up just 2.2 per cent, load factor rose 0.8 percentage points to 82.8per cent, the highest for any region. The economy is showing some positive signs; employment growth has picked up, as has consumer spending.
Middle East airlines recorded the strongest increase in passenger traffic in 2013, a rise of 12.1 per cent compared to 2012, but below the 15.4 per cent growth recorded in 2012 compared to 2011.Carriers in the region have benefited from the continued strength of regional economies, particularly Saudi Arabia and the United Arab Emirates and solid growth in business-related premium travel, particularly to developing markets such as Africa. However, capacity grew faster at 12.8per cent and load factor declined slightly by 0.1 percentage points to 77.3 per cent from 77.4 per cent in 2012.
Latin American carriers posted an 8.1per cent rise in demand in 2013 over 2012, down slightly compared to the 8.4per cent rise in 2012. This was the second-strongest performance (after the Middle East) and was supported by the healthy expansion of economies like Colombia, Peru and Chile. Capacity expanded 7.4 per cent year over year, causing load factor to climb to 79.2 per cent, up 1.3 percentage points compared to 2012.
African airlines’ demand rose 5.5 per cent, slightly above the global average but below 2012 growth of 7.5per cent. Capacity expansion of 5.2per cent meant load factor rose 1.9 percentage points to 69per cent, the lowest among the regions. Overall, the demand environment is strong, with robust economic growth of local economies and continued development of internationally trading industries. But some parts of the continent have shown weakness including South Africa, which recently experienced a slowdown in its economy, with a corresponding impact on the demand base for international air travel.
Domestic Passenger Demand
Domestic air travel demand rose grew by 4.9 per cent in 2013 compared to 2012, up from 4.0 per cent in 2012 versus 2011. Capacity rose 4.6 per cent and load factor climbed 0.4 percentage points to 79.9per cent. All markets recorded positive gains, with the strongest growth occurring in China and Russia.
US traffic expanded by1.9per cent in 2013 (up from 0.8per cent in 2012), while capacity grew at the same rate, with the result that load factor was flat at 83.8per cent, the highest for any market. The improvement in demand compared to 2012 reflects sustained increases in consumer confidence throughout the year as well as rising employment activity, particularly over recent months.
China traffic climbed 11.7per cent in 2013 compared to 2012, the strongest for any market. Capacity rose 12.2per cent last year, with the result that load factor declined 0.6 percentage points to 80.3per cent, which was still the second best among markets.
Japan’s domestic market improved significantly in 2013 as annual demand rose5.2per cent (up from 3.6per cent in 2012) while capacity expanded by 5.1per cent and load factor was little changed at 64.3per cent, by far the lowest for any market. Significant government stimulus led to an acceleration in the economy in the first half of 2013 which supported increases in business activity and improving employment rates, boosting air travel demand.
Brazil’s airlines recorded the slowest demand growth last year, with traffic up just 0.8per cent compared to 2012. Efforts by the government to stimulate the economy have borne little fruit, however capacity reductions by airlines of 3.3per cent pushed load factor to 76.3per cent, well above the 71.8per cent recorded in 2012.
Indian domestic traffic rose 4.0 per cent last year, compared to a 2.1per cent decline in 2012. The demand environment has been challenging in view of the weakening economy, high inflation and slowing manufacturing and resource industries. Capacity climbed 3.5per cent in 2013, and load factor was 74.6per cent, up 1.7 percentage points compared to 2012.
Russia had the second strongest domestic market, with demand up 9.6per cent in 2013 on a 9.1per cent rise in capacity. Russian demand is being supported by a resilient labor market and government policy focused on maintaining high employment and sustained income levels. Load factor was 74per cent.
Australian airlines’ domestic traffic rose 2.8per cent in 2013 compared to 2012, while capacity rose 3.8per cent, depressing load factor 1.0 percentage point to 76.5per cent. Interest rate cuts have failed to stimulate the economy, which remains broadly sluggish, with rising unemployment and fragile business and consumer confidence.