The International Air Transport Association has announced full-year traffic data for 2012 showing a 5.3% year-on-year increase in passenger demand and a 1.5% fall for cargo.
The 5.3% increase in passenger demand was slightly down on 2011 growth of 5.9% but above the 5% 20-year average. Load factors for the year were near record levels at 79.1%. Demand in international markets expanded at a faster rate (6.0%) than domestic travel (4.0%). In both cases emerging markets were the main drivers of growth.
The 1.5% fall in demand for air cargo compared to 2011 marked the second consecutive year of decline, following a 0.6% contraction in 2011. The freight load factor for the year was 45.2%.
“Passenger demand grew strongly in 2012 despite the economic bad news that dominated much of the last 12 months,” said Tony Tyler, IATA’s Director General and Chief Executive. “This demonstrates just how integral global air travel is for today’s connected world. At the same time, near-record load factors illustrate the extreme care with which airlines manage capacity. Growth and high aircraft utilisation combined to help airlines deliver an estimated US$6.7 billion profit in 2012 despite high fuel prices. But with a net profit margin of just 1.0% the industry is only just keeping its head above water.
“In contrast to the growth in passenger markets, the air cargo market contracted by 1.5%. The industry suffered a one-two punch. World trade declined sharply and the goods that were traded shifted towards bulk commodities more suited for sea shipping. The outstanding bright spot was the development of trade between Asia and Africa, which supported strong growth for airlines based in the Middle East (14.7%) and Africa (7.1%).”
International Passenger Demand
International passenger demand grew by 6.0% in 2012. The strongest growth came from emerging markets, particularly the Middle East (15.4%), Latin America (8.4%) and Africa (7.5%). Capacity grew more slowly than demand (4.0%) supporting a near record level international load factor of 78.9%.
Asia-Pacific carriers saw passenger growth of 5.2% in 2012, which was stronger than the 4.0% growth in 2011, though the 2011 figures were affected by the Japanese tsunami. The 2012 performance was in line with the global average and contributed about a fifth of the total industry growth. After a slow start, the fourth quarter was boosted by a revival in the Chinese economy and strengthening momentum in Asian exports and imports. Capacity expansion of just 3.0% for the year kept the load factor at a healthy average of 77.5%.
European airlines’ passenger traffic expanded 5.3% in 2012, sharply down on the 9.5% growth of 2011. Growth was generated by the long-haul performance of Eurozone airlines (within-EU travel stagnated due to slow economic growth). Additionally, around a quarter of the growth in European airline international traffic came from airlines outside of the Eurozone (Turkey being a major contributor). Capacity increased by 3.1%, pushing the full-year average load factor to 80.5%. Combined with other benefits of industry consolidation, the European industry broke even on the year – a much stronger financial performance than would be expected under such harsh economic conditions.
North American carriers reported the slowest international passenger growth of any region at 1.3% (down from 4.1% in 2011). Restructuring, consolidation, and tight capacity management (down 0.3% for the year) delivered the highest load factor (82.0%), contributing to an estimated $2.4 billion profit.
Middle East airlines contributed almost a third of the total expansion in international passenger markets with 15.4% growth (ahead of the 8.9% growth recorded in 2011 that was impacted by the Arab Spring). This was achieved with a capacity expansion of 12.5% while improving the load factor to 77.4%. The region’s carriers increased the connectivity of their expanding hubs with significant increases in both network (destinations) and frequency. Despite the expansion, the improved load factor indicates that the growth is sustainable and that airlines in the region have been successful in attracting new passengers.
Latin American carriers recorded 8.4% demand growth in 2012. This was the second-strongest performance (after the Middle East) and was supported by rising incomes and falling unemployment in the region (particularly Brazil). Capacity expanded more slowly than demand (7.5%) and the load factor stood at 77.9% for the year.
African airlines had a solid year of growth, up 7.5%, as the continent’s economic expansion drove traffic demand. Capacity expansion of 7.1% was just below traffic growth. This improved the load factor to 67.1%, but it was still the weakest of all regions.