Global air traffic rises in May amid Asia Pacific slowdown

MANILA, Philippines - Global passenger traffic grew at a faster rate of 5.6 percent in May amid the slowdown in the Asia Pacific region including the Philippines, data from the International Air Transport Association (IATA) showed.

IATA director general and chief executive officer Tony Tyler said air travel continued to expand at a healthy rate as overall demand rose 5.6 percent while capacity climbed 5.2 percent, pushing the load factor up to 78.1 percent.

“Global economic performance remains a concern, however, demand for air travel continues to expand. The primary driver is growing demand for connectivity to emerging markets,” Tyler stressed.

Data showed that May international traffic passenger demand rose 5.7 percent compared to the year-ago period amid a 5.6- percent rise in capacity resulting to a load factor of 77 percent.

International traffic of Asia-Pacific airlines rose at a slower pace of 3.7 percent in May compared to the year-ago period but this was more than offset by a 5.5-percent rise in capacity resulting to a 1.3-percent decline in load factor to 74.1 percent.

“The softness in demand is consistent with falls in business confidence in major Asian economies as well as a slowdown in trade growth momentum. In particular gross domestic product (GDP) growth in China did not meet expectations in the first quarter and business confidence has slipped to levels indicating contraction in manufacturing activity,” Tyler explained.

He added that the strongest growth occurred in the emerging markets of Africa, Latin America and the Middle East.

He pointed out that European carriers recorded 5.6- percent growth on international services, suggesting that improving consumer and business confidence in Europe could be supporting stronger growth in air travel demand.

“The business environment has also improved compared to mid-2012 with some indications of easing weakness in the eurozone. It’s still a tough environment, but there are some reasons for optimism in the second half of the year,” he said

Middle East carriers had the strongest year-on-year traffic growth for any region at 11.7 percent, followed by African airlines with 9.8 percent, Latin American airlines with 7.9 percent, and North American airlines with three percent.

On the other hand, domestic demand rose 5.6 percent driven primarily by markets in Asia, particularly China, with capacity rising 4.5 percent and load factor at 79.9 percent.

China’s domestic market jumped 13.4 percent, followed by Japan with 5.9 percent. US traffic climbed 2.8 percent in May while Brazil demand rose 4.3 percent and India at 3.5 percent.

Tyler said demand for air travel continues to be strong despite less-than-robust economic indicators in some key markets, demonstrating the importance of air transport.

IATA sees airlines booking profits amounting to $12.7 billion and revenues of $711 billion equivalent to a 1.8-percent net profit margin this year.