IATA Still Cautious As Passenger Traffic Rises

Aug. 02--Strong first-half airline passenger traffic offers the industry cautious optimism, but the International Air Transport Association (IATA) insists there is little immediate hope for an improvement in profitability.

The world's international and domestic travel demand, measured in revenue actually earned from passengers, grew by 4.8 percent and 4.6 percent, respectively, from January-June, rendering total year-on-year growth of 4.8 percent.

But the industry remains on track to make a mere $4 per passenger this year for a global net profit of $12.7 billion, said director-general Tony Tyler.

"There is little margin for error, and even a small change in the second half could shift the outlook significantly," he said.

The July IATA Airline Business Confidence index reported 61.5 percent of respondents expect an improvement in demand. But only 30.8% expect any improvement in yields over the next 12 months.

There was an accelerated rate of increase in June, driven by higher revenue passenger kilometre (RPK) for Asia-Pacific airlines, which carried half the international increase in global RPK volumes in June compared with May, said IATA.

Passenger load factors also reached a record high in June, slightly above 80 percent. But IATA said this result does not necessarily signal the start of a strong growth trend.

The performance of Asia-Pacific airlines throughout 2013 has been weaker than last year.

During the first half of this year, growth in Asia-Pacific international air travel has been 3.6  percent, down from a 5 percent expansion in 2012.

This is a result of slowing growth in recent months, as a combination of economic developments in the region weakened the demand for air travel.

Economic growth in China failed to meet expectations in the first quarter and slowed further in the second quarter.

First-half traffic growth by region measured by RPK year-on-year: the Middle East 11.7 percent, Africa 8.1 percent, Asia-Pacific 6.1 percent, Latin America 6 percent, Europe 3.4 percent and North America 1.9 percent.

Copyright 2013 - Bangkok Post, Thailand

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