India’s domestic market fell 1.1% compared to a year ago, marking the worst performance for any market. According to International Air Transport Association (IATA), the performance reflects the weakening economy among other factors. The market expanded at 20%-plus rates through 2010 and early 2011, while it almost stopped growing at the end of 2011. The country recorded a capacity rise of 2.1% in July, with a drop in load factors to 69.6% from 71.8% last year. Other domestic markets like China saw 9% increase in demand for July, while Japan registered 4.2% growth in domestic market.
The international passenger demand was up 3.5% compared to the year-ago period, exactly in line with a 3.5% expansion in capacity. “The uncertain economic outlook is having a negative impact on demand for air transport. The cargo business is 3.2% smaller than it was a year ago. And 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,” said Tony Tyler, IATA’s Director General and CEO.
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”.