Air travel market shrank only in India in February: IATA

The Indian domestic air travel market shrank 1.8 per cent in February 2014, compared to February 2013 while air travel markets across the world rose 5.3 per cent year-on-year in February 2014.

Total domestic capacity the world over grew 4.1 per cent and load factor rose 0.9 percentage points to 80.4 per cent.

In India, however, domestic passenger numbers fell this February, over same month last year, showing signs that the country's aviation industry is still in deep trouble, despite new airline launches.

"India was the only domestic market to see a contraction in demand. Traffic fell 1.8 per cent in February compared to February 2013. Subdued consumer sentiment ahead of the upcoming election, as well as elevated fare levels compared to a year ago, are likely exerting downward pressure on demand," IATA said.

Domestic Air Traffic Growth (Feb 2014 vs Feb 2013)

China P.R.
Russian Federation
RPK: Revenue Passenger Kilometers measures actual passenger traffic
ASK: Available Seat Kilometers measures available passenger capacity
PLF: Passenger Load Factor is per cent of ASKs used.

Growth was especially strong in the developing economies of Brazil, China and Russia, with all three recording double-digit increases in demand compared to the year-ago period.

Domestic air travel in China and Russia rose 12.0 per cent and 10.5 per cent, respectively, in February. Although there have been indicators of slowdown in the Chinese economy, domestic consumer demand remains solid. Air travel in Russia has been supported by the government's policy of sustaining employment and incomes.

Domestic Revenue Passenger Kilometres (RPKs) account for about 37 per cent of the total market where North American airlines tops the chart with about 67 per cent of their operations.

In Latin America, domestic travel accounts for 47 per cent 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 per cent of the region's operations.

It is less important for Europe and most of Africa where domestic travel represents just 11 per cent and 12 per cent of operations respectively. And it is negligible for Middle Eastern carriers for whom domestic travel represents just 6 per cent of operations.

Total passenger traffic market shares by region of carriers in terms of RPK are: Asia-Pacific 33.7 per cent, North America 24.4 per cent, Europe 23.9 per cent, Middle East 9.8 per cent, Latin America 5.8 per cent, and Africa 2.4 per cent.

IATA has suggested a reduction in taxes on air travel in order to help people enjoy the benefits of air travel, which could act as a key engine of growth and job creation.

International market
Global passenger traffic for February 2014 showed a demand growth of 5.4 per cent compared to February 2013, although this represented a slowdown compared the 8.2 per cent growth in traffic in January 2014.

Cumulative traffic growth for the first two months of 2014 stood at 6.9 per cent, which compares favourably with the 5.2 per cent overall growth achieved in 2013.

February capacity rose 5.2 per cent and load factor climbed 0.2 percentage points to 78.1 per cent. All regions except Africa experienced positive traffic growth.

''People are flying. Strong demand is consistent with the pick-up in global economic growth, particularly in advanced economies.'' said Tony Tyler, IATA's director general and CEO.

International passenger traffic rose 5.5 per cent in February 2014, compared to the year-ago period. Capacity rose 5.8 per cent and load factor slipped 0.2 percentage points to 76.8 per cent. All regions recorded year-over-year increases in demand.

European carriers' international traffic climbed 5.8 per cent in February 2014 compared to the year-ago period, the strongest growth among the three largest regions.

Capacity rose 5.7 per cent and load factor was stable at 77.4 per cent.

Growth in the manufacturing and service sectors has now reached rates not seen since the first half of 2013, according to JPMorgan/Markit's surveys of purchasing managers, and growth is also occurring in major economies like France.

Asia Pacific carriers recorded an increase of 4.0 per cent compared to February 2013. While this was down compared to January traffic growth (8.3 per cent), in part this was owing to the timing of the Lunar New Year, which took place in January, a month earlier than in 2013.

With capacity up 5.1 per cent over February 2013, load factor slipped 0.8 percentage points to 76.8 per cent. While regional economic activity is robust and trade volumes continue to accelerate, business activity has declined for the third month running in China, according to data from JPMorgan/Markit.

North American airlines saw demand rise 2.0 per cent in February over a year ago, a slowdown on the January growth rate (3.7 per cent). The demand backdrop in the region is showing signs of improvement, signalling that air travel should continue to expand in coming months. Capacity rose 2.6 per cent, pushing down load factor half a percentage point to 75.9 per cent.

Middle East carriers had the strongest year-over-year traffic growth in February at 13.4 per cent as airlines continue to benefit from the strength of regional economies and solid growth in business-related premium travel. The Gulf nations in particular are enjoying acceleration in non-oil sectors of their economies, further supporting strong demand for air travel. Capacity rose 12.5 per cent and load factor climbed 0.6 percentage points to 78.9 per cent.

Latin American airlines' traffic rose 4.2 per cent, only slightly behind January growth (4.6 per cent) and the outlook is broadly positive with continued robust performance of economies like Colombia, Peru and Chile, and the upcoming demand to be generated by the FIFA World Cup in Brazil. Capacity rose 2.1 per cent and load factor climbed 1.6 percentage points to 79.0 per cent, the highest for any region.

African airlines experienced the slowest demand growth, up 0.1 per cent compared to February 2013. With capacity up 4.1 per cent, load factor fell 2.6 percentage points to 63.7 per cent, by far the lowest among the regions. The weakness over recent months in part could reflect adverse economic developments in some parts of the continent, with the slowdown in the major economy of South Africa, as well as growing competition from airlines based outside the region.

IATA statistics cover international and domestic scheduled air traffic for IATA member and non-member airlines.