World’s Airlines Extend Robust Traffic Gains

 - December 9, 2013, 12:10 PM
Middle East airlines led all regions in international passenger traffic growth and gains in cargo carriage in October.

October airline traffic statistics published by the International Air Transport Association (IATA) last week showed substantial growth in virtually every region of the world, as global revenue passenger kilometers rose 6.6 percent compared with the same month a year earlier and 5.2 percent over September’s results. Even the cargo market resumed its fragile recovery in October, generating a 4-percent increase in freight ton kilometers.

A 6.9-percent rise in international traffic contributed more to the passenger improvement than did domestic traffic, albeit not by much. Domestic traffic rose 6 percent compared with October 2012, largely due to strong growth in developing markets. Asia-Pacific carriers continued their solid performance in recent months with a 7.8-percent rise in international traffic, marking the biggest gains among the world’s three largest regions. In absolute terms, Middle East carriers experienced by far the strongest year-over-year international traffic growth in October, at 14 percent, as airlines in the region benefitted from strong demand for business-related premium travel, particularly to developing markets such as Africa. Solid performance of key economies such as Saudi Arabia and the United Arab Emirates has also supported strong expansion in business and leisure travel.

Domestically, China led all countries listed in the IATA statistics with a 12.3-percent hike in traffic compared with the same period a year ago, a performance consistent with robust economic activity in the country. October capacity rose 11.7 percent and load factor grew 0.4 percentage points, to 80.9 percent. India and Russia also experienced double-digit growth, at 11.5 percent and 11.4 percent, respectively. In India, airlines have experienced substantial volatility in traffic, and the trend will likely continue, said IATA, as a result of unusually low volumes a year ago rather than growth in October. In Russia, what IATA called an “exuberant” result stood in stark contrast to indicators showing a slowdown in economic activity resulting primarily from weakness in consumer demand and trade activity.

In the cargo sector, the gradual expansion continues a trend that began in the third quarter as air freight markets have responded to better economic confidence and improved consumer demand, said IATA. Again, Middle East carriers reported the most impressive growth at 12.3 percent, while European and North American airlines reported growth of 4.4 percent and 3.7 percent, respectively. Asia-Pacific carriers grew by a marginal but significant 2 percent, finally countering a decline over most of 2013. The acceleration of Chinese growth and trade volumes across the region indicates that Asia-Pacific, which IATA characterized as “comfortably” the largest air freight region by market share, stands poised for continued expansion.

“Since mid-year we have seen modest but sustained growth in cargo fed by stronger business confidence and improving trade flows,” said IATA director general Tony Tyler. “Air cargo is still a tough business. Matching capacity to demand has been difficult in an environment where passenger traffic is growing more robustly. There is some evidence that the fall in load factors has stabilized, but yields remain under pressure.”