● IATA: African airlines' July Pax traffic grows 7.5% on 2012 as Cargo takes a knock.

In its July pax & cargo figures, the International Air Transport Association (IATA) has noted that overall global demand for air travel recorded another solid month of growth in July. Overall revenue passenger kilometers (RPKs) were up 5.0% compared to July 2012. All regions were up year-on-year, with emerging markets recording the strongest increases with African airline's pax figures growing 7.5% on July 2012. Overall global air cargo traffic results for July showing a continuation of the modest improvement trend experienced in June though African airlines faired for the worse with a 4.9% contraction in July year-on-year.

July & August 2013 Pax Figures © AFRAA
(Click to enlarge)

July 2013 Pax Figures © IATA (Click to enlarge)

Passenger Trend

All regions were up year-on-year, with emerging markets recording the strongest increases. Capacity rose 5.5% on the previous July, ahead of demand, and industry load factor dropped 0.4 percentage points to 82.4%.

Although July’s 5.0% performance was not as strong as June’s (6.1%), this likely reflects both a market correction in line with prevailing economic conditions as well as the impact of reduced travel in markets observing the Ramadan period.

“Passenger demand continues to be strong. But the story of emerging markets driving growth as developed economies stagnate could be shifting. We are still expecting growth of 5% this year. How that growth is achieved, however, appears to be at a turning point,” said Tony Tyler, IATA’s Director General and CEO. "The emergence of the Eurozone from an 18-month recession provided the biggest boost to traffic over recent months. In contrast, the deceleration of the Chinese economy has been a dampener on air travel, with weakness showing up throughout emerging Asian markets. The price of oil, a huge cost item for airlines, is tracking political tensions in the Middle East. Along with the global cost impact of this, at the regional level there is the potential for disruption for one of aviation’s strongest and most consistent growth markets,” said Tyler. 

As mentioned above, African airlines’ traffic climbed 7.5% compared to July 2012, second best among the regions, while capacity rose 5.6%, boosting load factor 1.3 percentage points to 73.6%, still the lowest among the regions. Expansion in trade is driving the healthy rise in demand for air travel on the continent.

July 2013 Cargo Figures © IATA (Click to enlarge)

Cargo & Freight Trends

Global air cargo traffic results for July showing a continuation of the modest improvement trend experienced in June. Global freight tonne kilometers (FTKs) were up 1.2% in July year-on-year, slightly better than the 0.9% year-on-year increase recorded in June, as growth in Europe and the Middle East offset weakness in Asia. As a result of the July performance, air freight volumes are at their highest level since mid-2011. Capacity increased 3.4% versus July 2012, pushing load factor down to 43.3%. However, load factors have stabilized compared to earlier in 2013. 

“The growth is encouraging, particularly in Europe. However, it is premature to say that air cargo may be emerging from the doldrums of the past 18 months. The weakness in Asia-Pacific freight markets and the deteriorating political situation in parts of the Middle East give ample reason for continued caution,” said Tony Tyler.

African airlines experienced a 4.9% contraction in July year-on-year. Despite a relatively supportive demand environment, reflected in the year-to-date FTK growth of 2.2%, airlines in the region continue to face intense competition for their product.  

The Bottom Line

“Economic growth and connectivity go hand in hand. Indeed, connectivity creates jobs and supports growth. So it is for good reason that the long-term sustainability of aviation will be high on the agenda when governments meet in Montreal at the end of this month for the 38th Assembly of the International Civil Aviation Organization (ICAO). The aviation industry is committed to addressing its climate change impact including the challenging target of carbon-neutral growth from 2020 (CNG2020). Governments set the same goal when they last met. So this Assembly is a golden opportunity to reach a global consensus by governments on how to achieve this goal efficiently,” said Tyler.

In June, IATA’s 240 member airlines supported a resolution calling on governments to reach a global agreement on a market-based measure (MBM) as a key tool to manage aviation’s carbon footprint and achieve the industry’s carbon-neutral growth target. Industry and governments must work together firstly on key measures to maximize the impact of improved technology, operations and infrastructure on aviation’s carbon footprint. An MBM would act as a complementary measure to enable the industry to meet the CNG2020 target. Specifically, the resolution supports a single mandatory carbon offset scheme as the simplest and most efficient MBM to implement. It also sets out key principles for the fair implementation of MBMs.

“Aviation is about growing connectivity and all the economic and social benefits it enables. Sustainability is a core part of this vision. We are doing all we can to support fully the success of governments in agreeing an aviation solution for sustainability that is global and which will underpin the future development of our important industry,” said Tyler.

Download the full July 2013 Global Passenger Traffic Report here.

Download the full July 2013 Global Cargo Traffic Report here.