"We are seeing a more positive environment for air travel demand, based on rising business confidence, a strong increase in export orders in September, and better performance of key emerging markets like China. The strong growth of recent months, coupled with the continuing improvements in air travel demand in September, suggests that there could be a further acceleration in air travel growth before the end of the year," said Tony Tyler, IATA’s Director General and CEO.
| Sept 2013 vs. Sept 2012 | RPK Growth | ASK Growth | PLF |
| International | 5.7% | 5.7% | 80.9% |
| Domestic | 5.1% | 4.7% | 79.1% |
| Total Market | 5.5% | 5.3% | 80.3% |
| YTD 2013 vs. YTD 2012 | RPK Growth | ASK Growth | PLF |
| International | 5.2% | 4.4% | 80.0% |
| Domestic | 4.8% | 4.2% | 80.2% |
| Total Market | 5.0% | 4.3% | 80.1% |
International Passenger Markets
September international passenger demand was up 5.7% compared to the same period in 2012. An equivalent increase in capacity led to load factor remaining unchanged at 80.9% when compared to September 2012. All regions saw demand increase compared to a year ago.
- Asia-Pacific carriers recorded an increase of 8.5% compared to September 2012, the strongest performance among the three biggest regions. Downward pressure on growth during recent past months appears to have eased. Improvement in China’s third quarter GDP growth and Japan’s economy are supporting international air travel on airlines in the region. Capacity growth of 7.1% pushed load factor up 1.0 percentage point to 78.1%.
- European carriers’ international traffic climbed 3.4% in September compared to the year-ago period. Capacity rose 3.1%, pushing load factor up 0.3 percentage points to 83.9%. Modest economic improvements continue to support growth. Improvements in manufacturing and export activities, and the acceleration in trade growth should help support international air travel demand on European carriers for the remainder of the year.
- North American airlines saw demand rise 2.3% over a year ago, a slowdown on the August growth of 5.1%. Capacity growth (3.1%) outpaced demand, pushing down load factor 0.6 percentage points to 83.9%. Consumer confidence and business activity has been improving throughout the third quarter. However, there could be some temporary downward pressure in the coming months due to the 17-day US government shutdown.
- Middle East carriers continued to show the strongest year-over-year traffic growth at 10.4%. The trend is likely to continue, with economies such as Saudi Arabia and the United Arab Emirates showing continued strong growth in non-oil producing sectors and robust increases in new export orders. Capacity expanded by 13%, pushing down load factor 1.9 percentage points to 77.2%.
- Latin American airlines posted a demand growth of 8.3% in September. While Brazil continues to suffer from rising inflation and weakening consumer demand, other economies, such as Colombia, Peru and Chile, are expanding strongly. Capacity grew 6.1% while load factor rose 1.7 percentage points to 80.9%.
- African airlines’ traffic grew 6.9% compared to September 2012, while capacity rose 7.4%, pushing down load factor 0.3 percentage points to 73.2%. The strong economic growth in several emerging economies, including Ghana and Nigeria, as well as increased trade activity, is supporting the demand growth.
Domestic Passenger Markets
Demand for domestic travel climbed 5.1% in September compared to a year ago, with all markets showing year-over-year increase. Total domestic capacity was up 4.7% and load factor rose 0.3 percentage points to 79.1%.
- US domestic traffic rose 1.4% in September, while capacity grew 1.0%, increasing load factor 0.3 percentage points to 81%, the highest among the domestic markets followed. The year-to-date traffic growth of 1.7% is an improvement on 2012. While the demand environment is broadly optimistic, with second quarter economic growth rates expected to be maintained in the third quarter, the US government shutdown potentially could have a negative impact on air travel volumes in October.
- China’s domestic traffic grew 10.6% compared to the year ago, confirming the robust trend in air travel. Indicators of manufacturing and services activity have improved in recent months, following a period of weakness in the second quarter. Capacity growth of 12.1% outpaced demand, leading to a 1.2 percentage points decline in the load factor to 80.2%.
- Japan’s domestic traffic expanded 7.8% in September year-on-year. Japan’s economy continues to show signs of improvement, with business activity and trade growth expanding solidly. Manufacturing and services growth reached a four month high in September. Capacity growth of 7.5% lifted the load factor 0.2 percentage points to 69.3%.
- Brazil’s domestic traffic rose 1.0%, a result of both capacity reductions and sluggish demand. Load factor climbed 2.3 percentage points to 78.1% following capacity cuts of 1.9%. This should help ease some of the downward pressure on profitability from weakening economic conditions. Brazil is the only major domestic market to see a year-to-date traffic decline (0.3%) with a significant fall in capacity (4.8%).
- Indian domestic traffic grew 16.4% in September following the strong August growth (18.5%). Capacity rose 5.7%, pushing up load factor 6.6 percentage points to 71.5%. The improvement over recent months is inconsistent with continued weakness in the economy and could be reflecting fare discounting. The year-to-date growth (4.0%) is a significant improvement on 2012, when the market contracted 2.1%.
- Russian demand climbed 12.1% compared to September 2012, despite indicators showing a slowdown in economic activity. Load factor rose 0.6 percentage points following an 11.2% increase in capacity.
- Australian domestic traffic rose 2.6% on a 1.9% rise in capacity, and load factor climbed 0.5 percentage points to 78.1%. The year-to-date growth (3.7%) has slowed compared to 2012 (above 5%).
The Bottom Line:
"As the global economy continues to recover, aviation is doing its part by supplying the connectivity that drives global trade and commerce. Aviation can do even more if governments see it as an enabler of growth and development, rather than as a source of tax revenues. The good news is that message is getting through in some places, as shown by the announcement by the Irish Government that it will abolish its air travel tax on 1 April next year. Since the tax was introduced in January 2009, Irish passenger numbers have dropped 30%. The government’s decision is excellent news for air travelers and for Ireland’s travel and tourism industry," said Tyler.
"Unfortunately, we also had disappointing news this month, as the European Commission proposed applying the Emissions Trading Scheme to all flights into and out of European airspace for the period those flights spend in EU airspace. The proposal, if agreed by the EU Parliament and the EU Council, risks nullifying all the hard work States achieved at the recent 38th Assembly of the International Civil Aviation Organization and could put aviation back in the middle of a potential trade war as non-EU States reject the attempt once again to impose the ETS unilaterally," Tyler added.
