The International Air Transport Association
(IATA) released global traffic results for February 2012 showing an 8.6%
improvement in passenger demand and a 5.2% rise in cargo demand compared to the
same month in the previous year.
Several factors inflated February 2012 results
and distorted comparisons with the year-ago period. These included weaker
traffic during the Arab Spring a year ago and the occurrence of Carnival in
Brazil in February, a month earlier than in 2011. Cargo demand was also subject
to positive distortion by the occurrence of Chinese New Year in January which
pushed some deliveries into February. When comparing to January 2012 levels,
the picture becomes much more moderate, with passenger demand growing by 0.4%
and cargo demand declining by 1.2%.
Global passenger capacity expanded by 7.4%
compared to previous-year levels, lagging behind the 8.6% increase in demand.
This has had a positive impact on load factors, which airlines have maintained
at 75.3%—better than the 74.4% recorded in February 2011.
Freight demand continued to be relatively
stable. This trend started to develop in September 2011 and is consistent with
improvements in business confidence.
“The outlook is fragile. Improvements in
business confidence slowed in February. This will limit the potential for
business class travel growth and it implies that an uptick for cargo is not
imminent. At the same time, airlines trying to recoup rising fuel costs could
risk reduced volumes on price sensitive market segments. Weak economic
conditions and rising fuel costs are a double-whammy that an industry
anticipating a 0.5% margin can ill-afford,” said Tony Tyler, IATA’s Director
General and CEO.
Feb 2012 vs. Feb 2011
|
RPK Growth
|
ASK Growth
|
PLF
|
FTK Growth
|
AFTK Growth
|
International
|
9.3%
|
7.3%
|
74.4
|
5.1%
|
7.7%
|
Domestic
|
7.6%
|
7.5%
|
76.7
|
5.7%
|
4.1%
|
Total Market
|
8.6%
|
7.4%
|
75.3
|
5.2%
|
6.9%
|
YTD 2012 vs. YTD 2011
|
RPK Growth
|
ASK Growth
|
PLF
|
FTK Growth
|
AFTK Growth
|
International
|
7.3%
|
5.6%
|
75.6
|
-1.6%
|
3.1%
|
Domestic
|
7.0%
|
5.8%
|
76.7
|
-0.4%
|
2.2%
|
Total Market
|
7.2%
|
5.7%
|
76.0
|
-1.5%
|
2.9%
|
International Passenger Markets
International air travel stood 9.3% above
February 2011 levels. Capacity expanded by 7.3% and load factors stood at
74.4%. It should be noted that except for Asia-Pacific, all regions saw demand
expand ahead of capacity when compared to February 2011.
· Asia-Pacific
carriers saw a 5.9%
increase in demand with a 6.2% increase in capacity. Load factors stood at
75.4%. Following a small spike in international travel over the Chinese New
Year period in January (6.4% growth) February traffic declined.
· European
carriers saw a 7.6%
increase in international demand, well ahead of the 5.0% increase in capacity.
This growth occurred despite the continuing sovereign debt crisis and weakened
consumer confidence. Load factors stood at 74.4%, up significantly from the
72.6% recorded for February 2011.
·
North American carriers showed the weakest growth in demand at 4.9%, which was still ahead
of 4.3% growth in capacity over the previous year. The average load factor was
the lowest among the major regions at 72.1%. While this performance was weak in
comparison to other regions, it was significantly better than January, when
international demand contracted by 0.3%. This
improvement follows strengthened consumer confidence and economic conditions.
· Middle East
carriers posted
23.4% international growth which is distorted by the poor performance in
February 2011 owing to the impact of the Arab Spring. Capacity growth stood at
16.1%. Average load factors for the region showed the most dramatic improvement
to 76.9% in February 2012 compared to 72.4% in the previous year. Stripping out
the distortions, we estimate that the region has now fully recovered.
· African carriers also saw a
positively distorted performance in February due to the Arab Spring with 24.7%
growth in demand and 20.2% growth in capacity. The first impacts of the Arab
Spring were felt in the Northern Africa region—primarily Egypt and Tunisia.
Load factors for the region stood at 62.7%. Although this was the lowest among
all the regions, it was significantly better than the 60.5% for February 2011.
Our estimate is that African carriers have fully recovered from the traffic
losses resulting from the Arab Spring.
· Latin American
airlines posted a
13.3% increase in demand against a 10.8% increase in capacity. Load factors
stood at 78.3%, the highest among the regions and well ahead of the 76.6%
achieved for February 2011. Carriers in the region benefitted most from the
traffic spike on Brazil routes associated with Carnival.
Domestic Passenger Markets
Overall domestic demand expanded by 7.6%, only
slightly ahead of the 7.5% increase in capacity. Average load factor was 76.7%,
which was higher than the 74.4% achieved on international routes.
· Brazil experienced
the fastest growth in February compared to the previous year. Demand was up by
17.9%, but lagged behind the 20.9% increase in capacity. Load factors stood at
66.5%, the weakest with the exception of Japan.
· India experienced
the second strongest growth among the major domestic markets at 12.3%. This
lagged behind the 16.3% increase in capacity over previous-year levels.
Nonetheless, India’s carriers filled 75.4% of seats. The strong traffic growth
masks financial weakness resulting from high operating costs and taxation.
·
China’s domestic
market stood at 10.1% above previous-year levels. This is significantly down
from the 17.3% growth in January owing to strong Chinese New Year
traffic. Load factors were the highest among
domestic markets at 79.3%.
·
The US domestic market saw considerably improved
performance in February with 5.2% demand growth. After keeping capacity flat
for several months, demand improvements were met with a 4.4% increase in capacity.
Load factors strengthened to 78.8%
· Japanese domestic
performance continues to suffer from the impact of last year’s earthquake and
tsunami combined with a tightening of capacity due to industry restructuring.
Demand was 8.8% below previous-year levels while capacity stood at -6.0%. Load
factors were the weakest among the major domestic markets at 61.4%.
Air Freight (Domestic and International)
· Air freight
volumes increased in February from a year ago by 5.2%. This was largely as a
result of cargo shipments that were postponed in January due to the Chinese New
Year holiday and the comparison to the previous year which was impacted by weak
demand associated with the Arab Spring. Air freight volumes showed a decline on
January’s performance of 1.2%.
· Cargo growth was
led by Middle East carriers with an 18.2% increase in demand
which was matched exactly with an 18.2% increase in capacity. The largest
volume contributor to February’s growth, however, was the Asia-Pacific
region which posted a 10.2% year-on-year gain.
· European and
North American carriers saw year-on-year declines in cargo traffic of 1.4% and 0.3%
respectively. Latin American airlines saw the most significant decline with a
3.6% fall compared to previous-year levels.
· African
carriers posted growth
of 3.2%% over the previous year demand levels but on very small volumes.
The Bottom Line
“We are ending the first quarter with a
considerable amount of uncertainty. While the threat of a European financial
meltdown seems more remote than it did only a few months ago, the political
risks that aviation faces are growing. The rapid increase in the price of oil
is already biting hard. The UK is increasing the onerous Air Passenger Duty.
Europe is adding to the burden with the inclusion of international aviation in
its emissions trading scheme—the extra-territorial aspects of which are
creating the possibility of a trade war that nobody can afford. The exact
conditions vary from country to country, but around the world we see
ill-conceived policy initiatives that over-regulate, excessively tax or
otherwise restrain the aviation industry. This prevents it from being the
catalyst for economic growth that it can be,” said Tyler.
The latest study by Oxford Economics on the
global benefits of aviation calculates that the industry supports 56.6 million
jobs and enables $2.2 trillion of economic activity. With 35% of the value of
goods traded internationally travelling by air, the connectivity provided by
air transport is one of the key enablers of global business.
“Aviation has transformed the world into a
global village. We did this even while making profit margins of less than 1% in
a policy framework best described as ‘tax-and-restrict’ in many markets.
Aviation could achieve much more with competitiveness-enabling policies that
support sustainable growth,” said