Air travel continues to trend up

Air demand was up 2.7 per cent on the previous January, according to new figures worldwide. 

This was slightly ahead of the 2.2 per cent expansion in capacity, said the International Air Transport Association, which compiled the figures. Load factors stood at 77.1 per cent. 

But the United States was being eyed as a possible spanner in the works. 

Global attention, noted the association, was focused on the US in order to understand the economic impact of mandated budget cuts. For millions of travellers and the aviation industry, the concerns went deeper, including threats of reduced availability of government-provided services for airport security, border control and air traffic management. 

“That the connectivity of the world’s largest economy is being held captive to politics is not acceptable. Airlines pay for air traffic management services through fees and taxes that average 20 per cent of the cost of a typical domestic air ticket.  

“Clearly there are some difficult budget decisions for the US government to make. But compromising connectivity which supports 9.3 million jobs and $669.5 billion in economic activity in the US is not the right choice,” said Tony Tyler, director general and CEO of the association. 

The association also noted that strong demand for air travel driven by the Chinese New Year had distorted the January figures. Chinese New Year fell in January 2012 and in February this year.  

“The comparisons to such a strong month made January 2013 demand look weaker than the underlying trend would indicate,” read the association’s report. “After adjusting for such seasonal factors, the International Air Transport Association estimated that the actual growth would have been 3.5 per cent. This growth was still lower than the 5.3 per cent 2012 average. However, air travel growth slowed sharply through the year and the results of the past few months represent an acceleration of demand growth. 

“Passenger travel is growing in line with business confidence levels,” the report continued. “Recent months have seen some positive economic signs emerge in both the US and China, and the eurozone crisis seems to have stabilised.  

“Of course, risks remain; the impact of US budget cuts has yet to play out and fuel prices are high. But even with those headwinds – real and potential – we still see underlying support for continued and potentially even strengthened growth.” 

International demand 

International markets outperformed the global industry average in January with a 3.7 per cent increase in demand against a 2.7 per cent capacity expansion. This led to load factors of 77.6 per cent. 

Latin American airlines posted the second highest growth in demand at 12.2 per cent. This was outpaced by capacity growth of 13.7 per cent. Load factors stood at 79 per cent, only exceeded by North American airlines. The regions’ growth is being fuelled by expanding economies, particularly Bolivia, Chile, Colombia and Peru, where reduced unemployment has boosted demand. 

North American carriers reported a 1.5 per cent expansion in demand even as capacity was trimmed by 0.8 per cent when compared to 2012 levels. 

Demand was strong on the back of improved economic performance in the US and airlines were tightly managing capacity. The region’s airlines posted the highest load factor at 79.4 per cent.