Airline passenger numbers surging on back of increased business confidence

Issues & Trends – May 2013

Airline passenger numbers surging on back of increased business confidence

WHILE much attention has rightly been focused on cruise passenger growth, air traffic around the globe is also showing a strong resurgence as developing markets grow strongly compared to established markets.

This somewhat mirrors the global cruise scene where the Australian market, still relatively young, is recording spectacular growth while more mature markets like the US and the UK, are lagging. (See ‘Home-porting’ pays off as NSW and Queensland lead further cruise market expansion)

In March this year, airlines grew international passenger numbers by six per cent over March 2012, according to latest figures from IATA.

This can be partly explained by Easter occurring in March this year and April last year but IATA reports: “The seasonally adjusted trend continues to show strong growth, with demand expanding at an eight per cent annualised rate in the six months since October 2012.”

Said IATA director general and chief executive Tony Tyler: “Strong demand for air travel is consistent with improving business conditions. Performance, however, has been uneven. Mature markets are seeing relatively little growth while emerging markets continue to show a robust expansion.

“Although oil prices have softened in recent weeks, they remain high against historical averages. In view of this, airlines are responding with a very cautious approach to capacity management.”

The IATA figures show the six per cent growth in international passenger demand in March this year, compared to March 2012, was well ahead of the capacity increase of 3.5 per cent, pushing load factor up 1.8 percentage points to 79.9 per cent.

Compared to February, traffic rose 0.4 per cent with the strongest growth occurring in the emerging markets of Latin America and the Middle East.

Asia Pacific carriers are also doing well, accounting for half the growth in international traffic since October.

In March Asia-Pacific carriers’ traffic rose 5.4 per cent compared to the same month last year, powered by strong growth in the Chinese market and an improvement in Asia trade since the 2012 fourth quarter.

Capacity rose 3.4 per cent year on year and load factor climbed 1.5 percentage points to 79 per cent. Compared to February, traffic rose 0.8per cent.

• Australian domestic traffic growth failed to keep pace with capacity.

Passenger numbers rose 2.7 per cent on a 3.9 per cent hike in capacity compared to March 2012. As a result, load factor declined 0.8 percentage point to 76 per cent.

“Although the growth trend for domestic demand is showing some signs of slowing, the outlook for the economy remains optimistic,” according to IATA.


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