Healthy passenger demand in November; domestic markets driving growth: IATA

Wednesday, 21 January 2015 01:29 -     - {{hitsCtrl.values.hits}}

IATA’s global passenger traffic results for November 2014 show a continuation of the healthy demand trend of recent months. Total revenue passenger kilometers (RPKs) rose 6.0% compared to November 2013, which was ahead of the 5.7% year-on-year growth recorded in October as well as the 10-year average growth rate of 5.6%. November capacity expanded by 5.4%, leading to a 0.5 percentage point rise in the load factor to 76.7%. Growth was driven primarily by domestic markets which experienced a 6.9% increase in demand over the previous November (an acceleration over the 5.3% year-to-date average for domestic travel). Chinese domestic travel (which rose 15.4% over the previous November) was the main contributor to this growth. International travel, meanwhile, experienced a slight deceleration in growth towards the end of the year. “November demand was healthy, but the overall picture is mixed. For example, strong traffic performance within China and India has not carried over into international demand for Asia Pacific carriers. And while lower oil prices should be positive for economic activity, softening business confidence is having a dampening effect on international travel,” said Tony Tyler, IATA’s Director General and CEO. International passenger markets November 2014 international passenger demand was up 5.4% compared to the year-ago period, which was below the 6.1% year-to-date growth trend. Capacity rose 5.9% and the load factor dipped 0.3 percentage points to 75.1%. All regions except Africa recorded year-on-year increases in demand. However, compared to October, most regions reported slower demand growth for November. European carriers’ demand for international services rose 5.6% in November 2014 compared to the year-ago period in spite of the region’s economic frailties and risks. Robust travel on low cost carriers is behind much of the growth. Capacity climbed 4.9% leading to a 0.5 percentage point rise in the load factor to 77.7%. Asia Pacific airlines recorded a 4.9% demand increase compared to November 2013 amid signs of a slowdown in regional production activity. Trade volumes have remained strong, however. With capacity up 5.6%, the load factor slipped 0.5 percentage points to 74.6%. North American airlines saw demand rise 2.0% over the 2013 period. This was an improvement over growth of 1.6% in October. November capacity rose 3.1%, causing load factor to fall 0.8 percentage points to 76.8%. The US economy is a notable bright-spot among developed economies, and recent gains in trade volumes bode well for business-related travel. Middle East carriers had the strongest traffic growth at 11.7%. This was the fourth consecutive month of double-digit year-on-year growth and the region’s economies are comparatively well-placed to withstand plunging oil revenues. Capacity rose 13.9% and load factor fell 1.4 percentage points to 70.1%. Latin American airlines experienced a 4.9% rise in demand in November. Capacity increased 5.7% and load factor fell 0.6 percentage points to 78.8%. Despite the decline, the load factor was the highest for any region. Although major economies in the region have been weak, the strength of the US economy has supported traffic carried by the region’s airlines. African carriers were the only ones to see a decline in demand: November traffic fell 2.5% compared to the same month in 2013. Capacity fell 3.1%, causing load factor to rise 0.4 percentage points to 63.8%, the lowest for any region. Passenger volumes for the region’s carriers are back at late 2012 levels. The recent weakness appears to reflect adverse economic developments in parts of the continent including Nigeria, which is highly reliant on oil revenues. The impact on traffic owing to the Ebola outbreak is largely restricted to Guinea, Liberia and Sierra Leone (markets that comprise a very small proportion of overall African traffic). Domestic passenger markets Demand for domestic travel rose 6.9% in November 2014 compared to the year-ago period, an acceleration of the October increase of 5.9%. Total domestic capacity was up 4.5% and load factor climbed 1.7 percentage points to 79.3%. China’s domestic traffic soared 15.4% compared to November 2013, the strongest performance for any market. In fact, two-thirds of the total increase in domestic RPKs over the last few months is attributable to gains in the Chinese domestic market. This is occurring in spite of ongoing signs of a slowdown in the Chinese economy and industrial activity, although consumer surveys and retail sales data remain robust. Australia’s domestic demand was virtually flat year-over year and traffic volumes have largely remained stagnant since mid-2013. The economy is struggling to rebalance away from mining investment-led growth. Bottom line Aviation is a vital driver of the global economy. Last month IATA issued an updated outlook forecasting industry earnings of $25 billion in 2015. While this appears large, at the global level, on revenues of $783 billion, a $25 billion profit represents a margin of just 3.2% or around $7 per passenger. And it is spread over a highly-fragmented and hyper-competitive industry with many hundreds of players, some of whom are making sustainable returns and many of whom are struggling. “Nonetheless, the industry is investing to improve the passenger experience. This year we expect to see some implementation of the New Distribution Capability, giving travelers the ability to view and purchase all of an airline’s products and services wherever they shop for air travel. And more passengers will have access to Fast Travel options such as self-boarding and self-tagging of luggage that offer convenience and time-savings and give them greater control over their journey,” said Tyler.

UN aviation body to propose 15-minute flight tracking standard

  Reuters: The United Nations aviation agency will propose a new standard that requires commercial aircraft to report their position every 15 minutes as part of a global tracking initiative in the aftermath of the disappearance of a Malaysian jetliner. The loss of Malaysia Airlines Flight MH370 last March sparked a global drive for a system that would make it possible to pinpoint the exact route and last location of an aircraft. An International Civil Aviation Organization (ICAO) spokesman said on Tuesday that the standard, if adopted, could go into effect in the near term because it would not require new technology on planes. ICAO members are set to discuss the proposal at a major safety conference in Montreal next month. Airline industry group International Air Transport Association (IATA) promised to lead an industry task force last year on the issue and to voluntarily improve tracking while ICAO developed its standard. In December, that industry task force recommended that airlines start tracking planes in at least 15 minute intervals within 12 months, but IATA itself balked, saying the deadline was not practical. ICAO Spokesman Anthony Philbin called the ICAO scheme a “foundational flight tracking standard.” The agency is developing more stringent tracking recommendations. “If (member states) agree to the standard, the safety conference will also be asked how quickly it expects it to be implemented and if it would want ICAO to expedite that process,” Philbin told Reuters via email. “Once our states have made their views known in that regard, we’ll have a better idea of the time frame.” ICAO could effectively force airlines to act because the standards it sets typically become regulatory requirements in its 191 member states. But the agency prefers to make decisions by consensus, making February’s conference crucial. Many airlines already track their planes using satellite systems. An ICAO working paper recently noted that the majority of long-haul aircraft already have systems on board that can transmit their position. But it noted that the equipment is not always turned on and that in some locations, including along polar routes, there are gaps in satellite coverage. Asked if radio could be used to meet the draft standard, ICAO’s Philbin said voice communication could serve as a fallback for planes that do not have newer technology.
 

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