Air travel flying flat: IATA

Global demand for air travel remains flat, despite seasonal increases during Ramadan in August, and the International Air Transport Association (IATA) predicting a positive change in the overall outlook for 2012.

Demand for air travel during August 2012 increased by 5.1 percent, compared to August last year.

Despite the rise, freight volumes fell 0.8 percent year-on-year for August and passenger demand has remained passive since June, expanding by just 1.2 percent since January.

“In the face of these adverse conditions, disciplined capacity management has kept load factors high,” IATA director general and chief executive Tony Tyler said.

“There are always opportunities and some parts of the world are growing but overall trading conditions are tough.”

The fall in airline profits from the $8.4 billion that the industry earned in 2011 will be cushioned by improved airline performance, according to IATA.

Globally airlines are expected to earn $4.1 billion in 2012, up $1.1 billion from the $3.0 billion forecast in June.

“The European sovereign debt crisis lingers on and China continues to moderate its growth and while some of these risks have diminished slightly over recent months, they continue to take their toll on business confidence,” Mr Tyler said.

“The outlook improvement is due to airlines performing better in a difficult environment.”

Evidence suggests consolidation is producing positive results.

“Growth is the only way forward and a healthy aviation industry can stimulate that, linking stagnating developed economies to robust emerging markets,” Mr Tyler said.

“Unfortunately, in many parts of the world, it is an uphill struggle with high taxes, onerous regulation and insufficient infrastructure - all of this stunts industry growth to the detriment of the world economy.”

IATA’s outlook for 2013 will see regional divergence continue; North American airlines are expected to continue raising profitability and improved cargo volumes for Asia-Pacific carriers will boost margins next year.

Sourced: etravelblackboardasia