Asia-Pacific carriers experienced the strongest growth
among the major regions, with demand up 6.2%
year-on-year, on a capacity increase of 2.5%. Some of
this growth, however, likely reflected depressed results
in 2011 owing to flooding in Thailand. The growth of
1.7% in November compared to October could be due to
volatility in the data given the extended period of
slower growth since early 2012. Airlines in the region
have experienced increased competition on long-haul
markets, and continued improvement in the month-on-month
growth would be needed to determine a change in trend.
Load factor surged 2.6 percentage points to 75.7%.
North American airlines’ demand was up 2.6% compared to
November 2011, an improvement on the weak 0.2% growth in
October, when Hurricane Sandy impacted international
flights across the North Atlantic. Airlines in the
region have experienced some of the slower growth rates
in international traffic throughout the year, but that
is largely a result of tight capacity management rather
than particularly weak demand. Capacity climbed 0.4%,
pushing load factor up 1.6 percentage points to 79.6%,
the highest for any region.
European carriers saw demand grow 4% compared to
November 2011, while capacity climbed 0.8% and load
factor was 77.8%, up 2.3 percentage points. Traffic rose
0.5% compared to October.
Middle East airlines’ demand expanded 10.5% compared to
November 2011, second best among the regions, continuing
the exceptional growth throughout the year. However,
this was outstripped by a capacity increase of 11.2%
which resulted in the load factor falling 0.5 percentage
points to 73.5%. Month-on-month growth was 0.3%.
Latin American carriers posted demand growth of 11.0%
compared to November 2011, the strongest of any region.
Although the Latin American economy has suffered from
the Eurozone crisis and China’s slower growth this year,
strong domestic demand in several major economies has
provided continued support to air travel. Capacity
climbed 9.8% leading to an improvement in load factor of
0.8 percentage points to 76.3%. Compared to October,
traffic rose 2.9%.
African airlines saw demand expand 5.0% year-on-year but
capacity growth was held in check, at 4.4%. Load factor
rose 0.4 percentage points to 64.7% but remains the
lowest of any region. Compared to October, African
traffic was up just 0.1%.
Domestic markets rose 3.0% compared to November 2011, an
improvement over the 2.4% year-on-year growth reported
in October. However, the month-on-month increase was
just 1.2%. Capacity growth of 3.3% outstripped demand
and load factor dipped 0.2 percentage points to 79.1%.
US
demand travel was up 1.1%, but capacity expanded 2.7%
leading to a 1.3 percentage point drop in load factor to
a still industry-leading 82.1%. Demand rose just 0.6%
compared to October.
Chinese demand grew 7.7%, lagging strong capacity
expansion of 10.3%. Load factor fell 1.9 percentage
points to 79.1%. Compared to October Chinese domestic
travel increased 1.9%.
Indian demand fell by 6.5%, reflecting the slowing
economy and sinking business confidence. Month on month
traffic increased by 3.2%, the second month of positive
growth in a row. However, it is not clear if India has
turned the corner as business fundamentals remain weak.
Japan traffic grew 4.4% year-on-year, eclipsing a 1.5%
increase in capacity and pushing load factor up 1.9
percentage points to 67.3%--which was still the weakest
for any market. Compared to October, demand rose 3%.
Brazil recorded strong demand growth of 10.2%. Brazil
has been the fastest-growing domestic market for two
consecutive months. Capacity fell 2.1% and load factor
jumped 8.3 percentage points to 73.9%. Compared to
October, traffic rose 2.3%.
Air freight markets rebounded strongly in November,
expanding by 1.6% after a 2.6% year-on-year decline in
October. Although some of this increase reflects the
impact of the Thai floods in the year-ago period, the
month-on-month increase of 2.4% is a positive sign.
Asia-Pacific airlines were responsible for almost half
the rise in total volumes compared to October. The 2.4%
rise in month-on-month volumes for the region was in
contrast to a 1.5% decline compared to November 2011.
Freight capacity fell 2.8% over the period. North
American carriers increased freight traffic by 1.7%, and
cut capacity by 0.6%, compared to November 2011.
European airlines’ year-on-year freight traffic was
flat, and capacity grew just 0.3%.
Middle East carriers’ freight showed the strongest
year-on-year growth of any region, up 16% on just a 6.1%
rise in capacity. Load factor surged to 46.7%, up 4
percentage points.
Latin American airlines’ freight grew 4.2% year-on-year,
but capacity grew at more than twice the rate, up 8.5%.
African carriers grew freight volumes by 4.4% compared
to November 2011. Although they kept the capacity
increase to 3.6%, the load factor of 26.2% was still the
weakest of all regions by a wide margin.
The Bottom Line, Tyler said “The recently-ended holiday
period serves as a reminder of the value aviation
provides. Travel made possible by aviation brought
seasonal goods to markets and re-united friends and
families around the globe to celebrate.
“2013 is the 100th year of commercial aviation. Over
that century, through an ever-expanding network, air
transport has transformed the way we live, work and
play, providing jobs for some 57 million people and
supporting $2.2 trillion in economic activity by
connecting people and goods on 35,000 routes.
“But continued connectivity growth is not guaranteed.
The industry’s expected margin in 2013 of 1.3% is very
weak. Furthermore current returns on investment are less
than half the industry’s cost of capital, which
continues to erode shareholder value.
“In the New Year, governments should resolve to
bring down the barriers to connectivity growth. This
can be done by addressing excessive taxation, high
infrastructure costs, onerous regulation and
improving the capacity and efficiency of airports
and air navigation services. A strong air transport
sector is in the self-interest of governments eager
to support economic growth and development. Trade is
the key to growth. For that connectivity is
critical. And it is aviation that makes connectivity
happen.
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