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Jul 03, 2014

African airlines show slowest passenger demand growth in May

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African airlines experienced the slowest regional growth in passenger demand in May, up 1.9% year-on-year, despite a capacity increase of 4.7% over the period, while the continent’s load factor took a 1.8 percentage-point knock to 64.4%.

“The weakness in international air travel demand for regional African carriers could, in part, be reflecting adverse economic developments in some parts of the continent, accompanied by the slowdown of the major economy of South Africa,” the International Air Transport Association (Iata) said on Thursday.

Globally, passenger traffic results for May showed demand growth of 6.2% compared with May 2013.

While this represented a deceleration compared with April’s year-over-year traffic growth of 7.6%, Iata believed this performance was indicative of improving demand drivers.

International capacity rose 5.2% in May and load factor climbed 0.7 percentage points to 79%, as all regions except Africa experienced positive traffic growth.

“We are seeing healthy demand for air traffic to support and help sustain the pick-up in global economic activity,” commented Iata CEO Tony Tyler.

This came as May international passenger traffic rose 7% compared with the year-ago period, while capacity rose 6% and the load factor climbed 0.8 percentage points to 78.1%. All regions recorded year-over-year increases in demand.

Looking more closely at regional markets, Asia Pacific carriers recorded a passenger demand increase of 7.3% compared with May 2013, which was the largest increase among the three biggest regions.

“This strong performance suggests that downward pressure on demand from sluggishness in the Chinese economy is likely easing,” Iata noted.

Capacity in this region rose 7.5%, pushing load factor down 0.1 percentage points to 74.1%.

In Europe, international traffic climbed 6.1% in May compared with the year-ago period, while capacity rose 5.3% and load factor rose 0.6 percentage points to 80.3%.

Iata attributed this to the fact that economic activity in the eurozone had recently been gaining momentum, with recent data suggesting that solid increases in industrial production and trade should result in acceleration in eurozone gross domestic product in the second quarter.

North American airlines, meanwhile, saw demand rise 4.4% in May over a year ago, implying positive underlying economic growth trends with easing pressure on employment levels.

Capacity rose 4.8%, pushing down load factor 0.3 percentage points to 83% – still the highest among all regions.

Middle East carriers had the strongest year-over-year passenger traffic growth in May, at 13.2%, as airlines continued to benefit from the strength of regional economies, including non-oil production sectors, and solid growth in business-related premium travel.

Capacity rose 6.9% and load factor climbed 4.4 percentage points to 78%.

In Latin American, airline passenger traffic rose 9.1%, while capacity rose 6% and load factor climbed 2.2 percentage points to 79.6%.

“The outlook for Latin American carriers remains broadly positive, with continued robust performances from economies like Colombia, Peru and Chile contributing to the strong demand environment,” Iata said.

Edited by: Tracy Hancock
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