The International Air Transport Association (IATA) announced global passenger traffic results for February showing demand growth of 5.4 per cent compared to February 2013. Although this represented a slowdown compared to the January traffic increase of 8.2 per cent, cumulative traffic growth for the first two months of 2014 was 6.9 per cent, which compares favourably with the 5.2 per cent overall growth achieved in 2013.
February capacity rose 5.2 per cent and load factor climbed 0.2 percentage points to 78.1 per cent. All regions except Africa experienced positive traffic growth. “People are flying. Strong demand is consistent with the pick-up in global economic growth, particularly in advanced economies.” said Tony Tyler, Director General and CEO, IATA.
February international passenger traffic rose 5.5 per cent compared to the year-ago period. Capacity rose 5.8 per cent and load factor slipped 0.2 percentage points to 76.8 per cent. All regions recorded year-over-year increases in demand.
Asia Pacific carriers recorded an increase of 4 per cent compared to February 2013. While this was down compared to January traffic growth (8.3 per cent), in part this was owing to the timing of the Lunar New Year, which took place in January, a month earlier than in 2013.With capacity up 5.1 per cent over February 2013, load factor slipped 0.8 percentage points to 76.8 per cent. While regional economic activity is robust and trade volumes continue to accelerate, business activity has declined for the third month running in China, according to data from JPMorgan/Markit.
Domestic markets rose 5.3 per cent in February compared to a year ago. Total domestic capacity was up 4.1 per cent and load factor rose 0.9 percentage points to 80.4 per cent.
India was the only domestic market to see a contraction in demand. Traffic fell 1.8 per cent in February compared to February 2013. Subdued consumer sentiment ahead of the upcoming election, as well as elevated fare levels compared to a year ago, are likely exerting downward pressure on demand.
“The strong demand for air travel at a time of rising business and consumer confidence is indicative of the symbiotic relationship between aviation and economic growth. The connectivity provided by aviation both enables and sustains trade and development, while economic activity creates demand for aviation. Governments that treat aviation as if it were a luxury item- or a necessary evil–are depriving their populations of a key engine of growth and job creation,” said Tyler.
Last month, the UK government recognised the principle that its onerous Air Passenger Duty (APD) was hurting the UK’s economic prospects — particularly its ties with emerging economies such as China, India and Brazil. From next April, the highest bands will be eliminated. This followed reductions agreed last year to address the economic damage that APD was doing to Northern Ireland. But despite these adjustments, planned annual inflation-related increases continue.
“This latest effort is half-hearted at best. Instead of immediately addressing the economic damage of this misguided tax, the government will eliminate the highest bands from next year. The APD is a drag on the UK economy that far outweighs even the billions of pounds that it siphons from the pockets of travelers. The government’s tinkering pays little more than lip service to this fact. It’s time for decisive action. Taxing a necessity like connectivity as if it were a social indulgence hurts the economy. A comprehensive review is needed,” said Tyler.
