IATA data show a 5.2% in passenger demand in 2013 compared to 2012 with 3.8% growth in Europe
IATA has produced its data for airlines globally for 2013, its air passenger market analysis. This shows there was a 5.2% increase in passenger demand in 2013 compared to 2012. ie in Revenue Passenger Kilometers. Its growth was 5.3% in 2012 and 5.9% in 2011. While RPK growth was 3.8% in Europe, it was 7.1% in Asia-Pacific; 11.4% in Middle East and 2.3 % North America. IATA’s figures show globally only 80% of plane seats are filled – so 20% were empty. Total passenger traffic market shares by region of carriers in terms of RPK are: Asia-Pacific 31.9%, North America 26.4%, Europe 23.9%, Middle East 9.3%, Latin America 6.0%, and Africa 2.6%. IATA says of Europe: “European carriers saw traffic rise 3.8% in 2013 compared to 2012, a slowdown compared to annual growth of 5.3% in 2012. Capacity rose 2.8% and load factor was 81%, second highest among the regions. Modest economic improvements in the Eurozone since the second quarter and rising consumer and business confidence are providing a stronger demand base for international travel.”
IATA figures for 2012 . link
Growth in RPK – Revenue passenger kilometres by airlines
|Growth compared to a year earlier||RPK growth in 2013||RPK growth in 2012||RPK growth in 2011||Growth in 2010|
From IATA press releases http://www.iata.org/pressroom/Pages/index.aspx
Passenger Demand Maintains Historic Growth Rates in 2013
6.2.2014 (IATA press release)
Geneva – The International Air Transport Association (IATA) announced full-year traffic results for 2013 showing a 5.2% increase in passenger demand compared to 2012. The 2013 performance aligns with the average annual growth rate of the past 30 years. Capacity rose 4.8% and load factor averaged 79.5% up 0.4 percentage points over 2012.
Demand in international markets (5.4%) expanded at a slightly faster rate than domestic travel (4.9%).Strongest overall growth (domestic and international combined) was recorded by carriers in the Middle East (11.4%) followed by Asia-Pacific (7.1%), Latin America (6.3%) and Africa (5.2%). The slowest growth was in the developed markets of North America (2.3%) and Europe (3.8%).
“We saw healthy demand growth in 2013 despite the very difficult economic environment. There was a clear improvement trend over the course of the year which bodes well for 2014. Last year’s demand performance demonstrates the essential and growing role that aviation-enabled connectivity plays in our world. And with system-wide load factors at 79.5% it is also clear that airlines are continuing to drive efficiencies to an ever-higher level,” said Tony Tyler, IATA’s Director General and CEO.
|Dec 2013 vs. Dec 2012||RPK Growth||ASK Growth||PLF|
|2013 vs. 2012||RPK Growth||ASK Growth||PLF|
International Passenger Demand
International passenger demand grew by 5.4% in 2013 compared to 2012 with all regions reporting growth. Capacity rose 4.9%, boosting load factor to 79.3%, up 0.4 percentage points over 2012.
Asia-Pacific airlines’ traffic rose 5.3% in 2013, the highest increase among the three major regions and slightly above 2012 annual growth of 5.2%. After a slow start, carriers in the region saw a pick-up in demand in the third quarter, supported by stronger performance of major economies such as China and Japan. Capacity expansion of 5.2% meant load factor was virtually flat at 77.7%.
European carriers saw traffic rise 3.8% in 2013 compared to 2012, a slowdown compared to annual growth of 5.3% in 2012. Capacity rose 2.8% and load factor was 81%, second highest among the regions and a 0.5 percentage point rise over 2012. Modest economic improvements in the Eurozone since the second quarter and rising consumer and business confidence are providing a stronger demand base for international travel; and after weakness in previous months, job losses in the Eurozone stabilized in December.
North American carriers reported the slowest passenger growth of any region at 3.0% compared to 2012 but an improvement over 2012 growth of 1.3%. With capacity up just 2.2%, load factor rose 0.8 percentage points to 82.8%, the highest for any region. The economy is showing some positive signs: employment growth has picked up, as has consumer spending.
Middle East airlines recorded the strongest increase in passenger traffic in 2013, a rise of 12.1% compared to 2012, but below the 15.4% growth recorded in 2012 compared to 2011. Carriers in the region have benefitted from the continued strength of regional economies, particularly Saudi Arabia and the United Arab Emirates and solid growth in business-related premium travel, particularly to developing markets such as Africa. However, capacity grew faster at 12.8% and load factor declined slightly by 0.1 percentage points to 77.3% from 77.4% in 2012.
Latin American carriers posted an 8.1% rise in demand in 2013 over 2012, down slightly compared to the 8.4% rise in 2012. This was the second-strongest performance (after the Middle East) and was supported by the healthy expansion of economies like Colombia, Peru and Chile. Capacity expanded 7.4% year over year, causing load factor to climb to 79.2%, up 1.3 percentage points compared to 2012.
African airlines’ demand rose 5.5%, slightly above the global average but below 2012 growth of 7.5%.
Capacity expansion of 5.2% meant load factor rose 1.9 percentage points to 69%, the lowest among the regions. Overall, the demand environment is strong, with robust economic growth of local economies and continued development of internationally trading industries. But some parts of the continent have shown weakness including South Africa, which recently experienced a slowdown in its economy, with a corresponding impact on the demand base for international air travel.
Domestic Passenger Demand
Domestic air travel demand grew by 4.9% in 2013 compared to 2012, up from 4.0% in 2012 versus 2011. Capacity rose 4.6% and load factor climbed 0.4 percentage points to 79.9%. All markets recorded positive gains, with the strongest growth occurring in China and Russia.
US traffic expanded by 1.9% in 2013 (up from 0.8% in 2012), while capacity grew at the same rate, with the result that load factor was flat at 83.8%, the highest for any market. The improvement in demand compared to 2012 reflects sustained increases in consumer confidence throughout the year as well as rising employment activity, particularly over recent months.
China traffic climbed 11.7% in 2013 compared to 2012, the strongest for any market. Capacity rose 12.2% last year, with the result that load factor declined 0.6 percentage points to 80.3%, which was still the second best among markets.
Japan’s domestic market improved significantly in 2013 as annual demand rose 5.2% (up from 3.6% in 2012) while capacity expanded by 5.1% and load factor was little changed at 64.3%, by far the lowest for any market. Significant government stimulus led to an acceleration in the economy in the first half of 2013 which supported increases in business activity and improving employment rates, boosting air travel demand.
Brazil’s airlines recorded the slowest demand growth last year, with traffic up just 0.8% compared to 2012. Efforts by the government to stimulate the economy have borne little fruit, however capacity reductions by airlines of 3.3% pushed load factor to 76.3%, well above the 71.8% recorded in 2012.
Indian domestic traffic rose 4.0% last year, compared to a 2.1% decline in 2012. The demand environment has been challenging in view of the weakening economy, high inflation and slowing manufacturing and resource industries. Capacity climbed 3.5% in 2013, and load factor was 74.6%, up 1.7 percentage points compared to 2012.
Russia had the second strongest domestic market, with demand up 9.6% in 2013 on a 9.1% rise in capacity. Russian demand is being supported by a resilient labor market and government policy focused on maintaining high employment and sustained income levels. Load factor was 74%.
Australian airlines’ domestic traffic rose 2.8% in 2013 compared to 2012, while capacity rose 3.8%, depressing load factor 1.0 percentage point to 76.5%. Interest rate cuts have failed to stimulate the economy, which remains broadly sluggish, with rising unemployment and fragile business and consumer confidence.
The Bottom Line
Commercial aviation is celebrating its first century in 2014.
“What was impossible yesterday is an accomplishment of today, while tomorrow heralds the unbelievable.” With these words, Percival Fansler, creator of the St. Petersburg-Tampa Airboat Line, inaugurated the era of commercial aviation on 1 January 1914.
“Fansler was right. The first century of commercial aviation has changed the world. It has made it a better place through connectivity. Forward-looking governments recognize the power of aviation to drive economic growth and spread prosperity. These governments are laying the foundations for our next century and in doing so will reap enormous benefits. But not all governments are on the same page. This anniversary year is an opportunity to remind short-sighted governments that they risk being left behind if they cripple aviation with taxes, over-burden it with onerous regulation, or fail to provide the infrastructure that it needs to grow,” said Tyler.
Notes for Editors:
IATA (International Air Transport Association) represents some 240 airlines comprising 84% of global air traffic.
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Domestic RPKs account for about 37% of the total market. It is most important for North American airlines as it is about 67% of their operations. In Latin America, domestic travel accounts for 47% of operations, primarily owing to the large Brazilian market. For Asia-Pacific carriers, the large markets in India, China and Japan mean that domestic travel accounts for 42% of the region’s operations. It is less important for Europe and most of Africa where domestic travel represents just 11% and 12% of operations respectively. And it is negligible for Middle Eastern carriers for whom domestic travel represents just 6% of operations.
Explanation of measurement terms:
RPK: Revenue Passenger Kilometers measures actual passenger traffic
ASK: Available Seat Kilometers measures available passenger capacity
PLF: Passenger Load Factor is % of ASKs used.
IATA statistics cover international and domestic scheduled air traffic for IATA member and non-member airlines.
All figures are provisional and represent total reporting at time of publication plus estimates for missing data. Historic figures may be revised.
Total passenger traffic market shares by region of carriers in terms of RPK are: Asia-Pacific 31.9%, North America 26.4%, Europe 23.9%, Middle East 9.3%, Latin America 6.0%, and Africa 2.6%.
By comparison, for 2008:
- International passenger traffic market shares by region in terms of RPK are: Europe 34.1%, Asia Pacific 31.1%, North America 18.7%, Middle East 9.2%, Latin America 4.5%, Africa 2.4%
By comparison the Iata press release for 2012 figures is at http://www.iata.org/pressroom/pr/Pages/2013-01-31-01.aspx
Passenger Demand Grew as Air Cargo Declined in 2012
Geneva – The International Air Transport Association (IATA) announced full-year traffic data for 2012 showing a 5.3% year-on-year increase in passenger demand and a 1.5% fall for cargo.
The 5.3% increase in passenger demand was slightly down on 2011 growth of 5.9% but above the 5% twenty-year average. Load factors for the year were near record levels at 79.1%. Demand in international markets expanded at a faster rate (6.0%) than domestic travel (4.0%). In both cases emerging markets were the main drivers of growth.
The 1.5% fall in demand for air cargo compared to 2011 marked the second consecutive year of decline, following a 0.6% contraction in 2011. The freight load factor for the year was 45.2%.
“Passenger demand grew strongly in 2012 despite the economic bad news that dominated much of the last twelve months. This demonstrates just how integral global air travel is for today’s connected world. At the same time, near-record load factors illustrate the extreme care with which airlines manage capacity. Growth and high aircraft utilization combined to help airlines deliver an estimated $6.7 billion profit in 2012 despite high fuel prices. But with a net profit margin of just 1.0% the industry is only just keeping its head above water,” said Tony Tyler, IATA’s Director General and CEO.
“In contrast to the growth in passenger markets the air cargo market contracted by 1.5%. The industry suffered a one-two punch. World trade declined sharply. And the goods that were traded shifted towards bulk commodities more suited for sea shipping. The outstanding bright spot was the development of trade between Asia and Africa which supported strong growth for airlines based in the Middle East (14.7%) and Africa (7.1%),” said Tyler.
|Dec 2012 vs. Dec 2011||RPK Growth||ASK Growth||PLF||FTK Growth||AFTK Growth|
|2012 vs. 2011||RPK Growth||ASK Growth||PLF||FTK Growth||AFTK Growth|
International Passenger Demand
International passenger demand grew by 6.0% in 2012. The strongest growth came from emerging markets, particularly the Middle East (15.4%), Latin America (8.4%) and Africa (7.5%). Capacity grew more slowly than demand (4.0%) supporting a near record level international load factor of 78.9%.
Asia-Pacific carriers saw passenger growth of 5.2% in 2012 which was stronger than the 4.0% growth in 2011, though the 2011 figures were affected by the Japanese tsunami. The 2012 performance was in line with the global average and contributed about a fifth of the total industry growth. After a slow start, the fourth quarter was boosted by a revival in the Chinese economy and strengthening momentum in Asian exports and imports. Capacity expansion of just 3.0% for the year kept the load factor at a healthy average of 77.5%.
European airlines’ passenger traffic expanded 5.3% in 2012, sharply down on the 9.5% growth of 2011. Growth was generated by the long-haul performance of Eurozone airlines (within-EU travel stagnated due to slow economic growth). Additionally, around a quarter of the growth in European airline international traffic came from airlines outside of the Eurozone (Turkey being a major contributor). Capacity increased by 3.1%, pushing the full-year average load factor to 80.5%. Combined with other benefits of industry consolidation, the European industry broke even on the year—a much stronger financial performance than would be expected under such harsh economic conditions.
North American carriers reported the slowest international passenger growth of any region at 1.3% (down from 4.1% in 2011). Restructuring, consolidation, and tight capacity management (down 0.3% for the year) delivered the highest load factor (82.0%), contributing to an estimated $2.4 billion profit.
Middle East airlines contributed almost a third of the total expansion in international passenger markets with 15.4% growth (ahead of the 8.9% growth recorded in 2011 that was impacted by the Arab Spring). This was achieved with a capacity expansion of 12.5% while improving the load factor to 77.4%. The region’s carriers increased the connectivity of their expanding hubs with significant increases in both network (destinations) and frequency. Despite the expansion, the improved load factor indicates that the growth is sustainable and that airlines in the region have been successful in attracting new passengers.
Latin American carriers recorded 8.4% demand growth in 2012. This was the second-strongest performance (after the Middle East) and was supported by rising incomes and falling unemployment in the region (particularly Brazil). Capacity expanded more slowly than demand (7.5%) and the load factor stood at 77.9% for the year.
African airlines had a solid year of growth, up 7.5%, as the continent’s economic expansion drove traffic demand. Capacity expansion of 7.1% was just below traffic growth. This improved the load factor to 67.1%, but it was still the weakest of all regions.
Domestic Passenger Demand
Domestic air travel grew by 4.0% in 2012. China (9.5%) and Brazil (8.6%) were the strongest performers. India was the weakest with a 2.1% contraction on 2011 levels. Total capacity growth (3.8%) was in line with demand (4.0%) and the domestic load factor stood at 79.5%.
US traffic expanded by 0.8% in 2012 (down from 1.5% in 2011), and capacity grew by just half of that at 0.4%. This supported an 83.4% load factor—the strongest among the major markets. The slowdown reflects the maturity and subdued economic growth of the US market which accounts for about half of all domestic travel.
China and Brazil showed the strongest demand growth in 2012, of 9.5% and 8.6% respectively. They both increased capacity, but Chinese capacity growth of 11.3% outstripped demand, whereas Brazil’s 4.8% was around half the traffic increase. Nevertheless, at 80.9%, Chinese load factor remained strong, and considerably higher than Brazil’s 71.8%.
Japan’s domestic market saw demand grow by 3.6% in 2012 while capacity expanded by 2.3%. Japanese domestic demand continues to suffer from a weak economy that stalled the recovery from the 2011 earthquake and tsunami. Japan’s domestic market remains 7% smaller than pre-tsunami levels with the weakest load factor (62.0%) among the major domestic markets.
Indian domestic travel shrank by 2.1% on 2011 levels. Weak economic growth was exacerbated by increasing operational costs, insufficient infrastructure, high taxes and onerous regulation. Capacity growth fell to 0.3% (from 16.2% in 2011) and the average load factor for the year was 72.9%.
Air Cargo (Domestic and International)
Air freight markets declined for a second straight year, falling a further 1.5% in 2012 after a 0.6% decline in 2011. Air cargo has come under pressure from a slowdown in world trade growth, and shifts in the freight commodity mix. Expanding emerging economies have driven demand for bulk items carried by sea, while economic weakness in the West dampened demand for high-value consumer goods transported by air. Freight capacity grew just 0.2% over the year, and the freight load factor was 45.2%.
Asia-Pacific airlines (the largest players in the air cargo market) reported a 5.5% decline in demand and cut capacity by 2.4%. As the world’s major manufacturing center, the region suffered from the slowdown in demand from Western markets. The freight load factor, although remaining the highest of all regions at 56.1%, fell more sharply than anywhere else, hurting cargo profitability.
European and North American carriers also saw falls in freight demand, of 2.9% and 0.5% respectively. European carriers increased its capacity by 0.3% which led to the load factor falling to 47.2%. North American carriers managed to reduce capacity by 2.0%, ahead of the fall in demand, but it still left the region’s freight load factor at 35.0%, the second weakest of any region.
Latin American airlines saw freight demand decline by 1.2%, but capacity grew 4.9% over the year, leaving the load factor to fall to 38.3%.
African and Middle Eastern carriers were beneficiaries of new trade lanes and developing trade links between the two regions. Freight demand grew 7.1% and 14.7% respectively, both improvements on 2011 when the Middle East expanded 8.2% and Africa declined by 2.1%. The Middle East had the fastest capacity expansion of any freight region (11.4%) but the load factor still improved to 44.8%. Africa’s freight capacity grew 9.2%, outstripping demand. The freight load factor fell to just 24.7%, the lowest of any region by a significant margin.
The Bottom Line
“We are entering 2013 with some guarded optimism. Business confidence is up. The Eurozone situation is more stable than it was a year-ago and the US avoided the fiscal cliff. Significant headwinds remain. There is no end in sight for high fuel prices and GDP growth is projected at just 2.3%. But improved business confidence should help cargo markets to recover the lost ground from 2012. And the momentum built-up at the year-end should see the passenger business expand close to the 5% historical growth trend. 2013 will not be a banner year for profitability, but we should see some improvement on 2012,” said Tyler.
In its December outlook for 2013, IATA projected that 2013 would see 4.5% growth in passenger markets and 1.4% growth for cargo demand. That will contribute to an improvement in profitability from $6.7 billion (1.0% net profit margin) in 2012 to $8.4 billion (1.3% net profit margin) in 2013.