Passenger growth in slow decline

Airlines worldwide finished 2012 having carried 5.3% more passengers than in 2011, but projections are for slower growth of 4.5% this year.

On the other hand, air freight volume fell by 1.5% last year but is expected to rebound this year to 1.4% growth, says the International Air Transport Association (IATA).

Last year's increase in passenger demand fell from 2011's 5.9% growth but above the 20-year average of 5%.

Load factors for the year were at a near-record 79.1%, said the industry body, which represents 240 airlines accounting for 84% of global air traffic.

Demand in international markets expanded at a faster rate (6%) than domestic travel (4%), with emerging markets the main growth drivers in both cases.

Last year's drop in demand for air cargo marked the second consecutive annual decline after a 0.6% contraction in 2011. The freight load factor was 45.2%.

The strong growth in passenger demand last year came despite the bad global economy, demonstrating just how integral global air travel is to today's interconnected world.

At the same time, the near-record load factors illustrated the extreme care with which airlines manage capacity.

Growth and high aircraft utilisation combined to help airlines deliver an estimated US$6.7-billion net profit in 2012 despite high fuel prices.

"But with a net profit margin of just 1%, the industry is only just keeping its head above water," IATA director-general Tony Tyler said in a statement.

In contrast with the growth in passenger markets, the air cargo market contracted by 1.5%.

The industry suffered a one-two punch _ world trade declined sharply, while the goods that were traded shifted towards bulk commodities more suited for sea shipping.

The outlook for 2013 is one of guarded optimism _ business confidence is up, the euro-zone situation is more stable than it was a year ago, and the US has avoided the fiscal cliff. But significant headwinds remain. There is no end in sight for high fuel prices, while GDP growth is projected at just 2.3%.

About the author

columnist
Writer: Boonsong Kositchotethana
Position: Deputy Editor Business