IATA: Asia Pacific Carriers Faring Better Than Global Peers
NEW DELHI: When Jet Airways and SpiceJet reported profits in the April-June combine after five consecutive loss-making quarters, the two Indian carriers were following a global trend of Asian carriers faring better than their peers globally. The International Air Transport Association (IATA) says initial results for Q2 show strong performance by Asia-Pacific airlines, but still weaker results for the industry overall compared to Q2 2011.
"The airline industry typically earns a majority of its profits in Q2 and Q3, with seasonal losses expected in Q1 and Q4... The sample of 42 airlines indicates that industry net profits are more than 20% down in Q2 compared to a year ago. The weakness is coming primarily from Europe, with airlines in the region reporting a three-fold decline in profits in Q2 compared to a year ago," IATA's financial monitor for June-July, 2012, says.
The agency says average worldwide fares continue to show weakness, despite a slight uptick in May, maintaining the divergence to US yields. It suggests that regions other than the US have not had the same success in maintaining load factors and profitability.
"Passenger capacity continues to rise, and in June the increase has come at a greater rate than the rise in demand. In June compared to May, the increase in capacity was 0.4% while passenger demand increased by only 0.3%. The number of seats in the airline fleet increased by 0.8% in June, accelerating the growth trend in capacity that started at the beginning of 2012, after a slight slowdown in May," the report. The number of seats is now growing at about a 9% annualized rate, which is exceeding the growth in passenger demand, and placing downward pressure on load factors.
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