Emerging markets boost global traffic growth in May: IATA

Singapore
Source:
This story is sourced from Pro
See more Pro news »

Emerging markets helped global air passenger traffic in the month of May, according to IATA traffic figures.

Compared with May 2012, demand rose by 5.6% and capacity grew by 5.2%, says IATA. This pushed load factors up by 0.3 percentage points to 78.1%.

"Global economic performance remains a concern; however, demand for air travel continues to expand," says IATA chief executive Tony Tyler.

"The primary driver is growing demand for connectivity to emerging markets. The business environment has also improved compared to mid-2012 with some indications of easing weakness in the eurozone. It's still a tough environment, but there are some reasons for optimism in the second half of the year."

International markets recorded a 5.7% rise in demand for May, while capacity grew by 5.6%. Load factor was flat at 77%.

Domestic passenger demand rose by 5.6%, with growth coming primarily within Asia, especially China. Capacity rose by 4.5% and the load factor rose by 0.9 percentage points to 79.9%.

IATA believes demand for air travel remains strong despite "less-than-robust economic indicators in some key markets. But that importance does not carry through to the bottom line".

IATA forecasts that globally airlines will earn $12.7 billion in profits in 2013 on $711 billion in revenue, which is a 1.8% profit margin at approximately $4 per passenger.

"The average profit per passenger is just enough to buy a sandwich in most parts of the world," says Tyler. "Aviation will have to do much better than that in order to attract the $4-5 trillion in capital investment that will be needed over the next 20 years to meet the demands for aviation-enabled connectivity."