Demand for air travel decelerates in March

business May 06, 2014 00:00

By The Nation

International passenger traffic rose 2.6 per cent in March, a significant slowdown compared to the 5.4 per cent increase in February, according to the International Air Transport Association (IATA).

Capacity rose 5.5 per cent and load factor fell 2.3 percentage points to 78.0 per cent. Most regions experienced a slowdown in year-on-year growth rates. 
“After a number of very strong months we are seeing a slowing of demand growth. The strong performance of advanced economies nevertheless is likely to support the continued growth of traffic in the coming months,” said Tony Tyler, IATA’s Director General and CEO.
Asia Pacific carriers experienced some of weakest traffic growth in March with international traffic up just 1.1 per cent compared to a year ago. Part of this is attributable to the relative slowdown in demand after the positive impacts from the Lunar New Year in January/February. But the result is also probably owing to downward pressure from continued weakness in the Chinese economy, as well as a recent contraction in regional trade volumes. Capacity rose 5.3 per cent and load factor fell 3.1 percentage points to 76 per cent.
European carriers’ international traffic climbed 2.0 per cent in March compared to the year-ago period, down from a 5.7 per cent growth rate a month earlier. The slowdown may be linked to weaker economic performance in emerging markets given that Europe’s economic performance has been undergoing a continuous, steady improvement since mid-2013.  Capacity rose 4.6 per cent and load factor slipped 2 percentage points to 79.6 per cent
North American airlines saw demand rise 0.6 per cent in March compared to a year ago, a slowdown on the February growth rate of 2.0 per cent. Weakness in international air travel growth for North American carriers is likely in part due to the weather-related slowdown in the first quarter. With capacity up 4.7 per cent, load factor fell 3.3 percentage points to 80 per cent.The latest data suggest that growth trends in business activity are positive and downward pressure on employment is easing, which could support stronger growth in the future.
Middle East carriers had the strongest year-on-year traffic growth in March at 10.0 per cent as airlines continue to benefit from the strength of regional economies and solid growth in business-related premium travel. The Gulf nations are benefitting from acceleration in non-oil sectors of their economies and positive developments in sectors such as trade, transport and tourism. Capacity rose 10.7 per cent however, and load factor dipped 0.5 percentage points to 79.5 per cent.
Latin America was the only region to see an improvement in March compared to February, with regional carriers registering a rise of 4.7 per cent year-on-year, compared to 4.2 per cent in the prior month. The outlook for Latin American carriers remains positive, with continued robust performance from economies like Colombia, Peru and Chile. Latin America was the only region with an increase in load factor- in March load factor was 78.8 per cent, up from 77.0 per cent in the year-ago period.
African airlines experienced the only contraction in demand among the regions, with demand down 2.6 per cent from a year ago. The weakness in international air travel could be in part from the adverse economic developments in some parts of the continent, namely the slowdown of South Africa. Airlines in Africa have seen virtually no growth –only 0.2 per cent– during the first quarter of 2014 compared to the same period in 2013. 
Every day nearly 100,000 flights carry 8.6 million passengers and $17.5 billion of goods to their destination. 

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