Asian air traffic growth stagnates

Asian air traffic growth stagnates

Air traffic in the Asia Pacific region has stagnated, expanding less than 1% in July 2012.

According to the latest data from IATA, the annualised growth rate of 0.9% represents a major decline from the 5.8% expansion recorded in June. Significantly, traffic levels actually fell 1.3% compared to the previous month, while Asian cargo demand declined 7.8% – the largest drop of any region.

The Asian aviation sector could be heading into trouble
The Asian aviation sector could be heading into trouble

The slowdown in regional aviation demand is reflective of a general slowdown in the region’s travel and tourism sector. Recent data from STR Global showed that the Asia Pacific’s hotel sector had experienced its first dip in revenue per available room (revPAR) since October 2009, following a 2.2% drop in occupancy levels.

“The uncertain economic outlook is having a negative impact on demand for air transport,” said Tony Tyler, IATA’s Director General & CEO. “Passenger markets — with the exception of Africa, China-domestic and the Middle East — saw demand fall from June to July. Overall passenger demand is still up 3.4% on the previous July. But the growth trend is clearly slowing. This, along with rising fuel prices is likely to make it a tough second half of the year.”

One area that offers cause for optimism however, is China. Despite the poor first half performances of China’s major airlines, the country saw a rebound in domestic traffic in July 2012. Despite concerns over the Chinese economy, China’s domestic air traffic grew 9.0% year-on-year, up from the 7.8% growth seen in June. Load factors averaged a healthy 84.1%.

Japan’s domestic market rose 4.2% year-on-year in July 2012, but slipped 1.0% compared to June. IATA noted that the market has now contracted 4% this year and is 10% smaller than pre-earthquake levels.

The 3.4% global passenger traffic growth in July 2012 marked a considerable slowdown from the 6.3% growth seen the previous month. IATA said the slowdown was due to a “fall in business confidence in many economies”.

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