Weaker outlook for Asia Pacific airlines

Weaker outlook for Asia Pacific airlines
By admin


Global air demand continued to rise in July but aggressive capacity growth in Asia Pacific is unsustainable, according to aviation’s governing body.

The number of available seats across the region climbed 6.6% with traffic rising 6.3% compared to the same period last year.

But “support growth at this rate is weakening”, the International Air Transport Association (IATA) said in its monthly update.

China’s economy is continuing to slow, trade volumes in emerging Asian markets have shrunk 5% in the first half of the year and India’s growth prospects look “bleak”, IATA said.

Europe, however, is continuing to recover and has been the biggest driver of passenger growth over recent months.

Global demand, measured in revenue passenger kilometres (RPK) climbed 5% in July with capacity up 5.5%. Loads slipped 0.4 percentage points.

“Passenger demand continues to be strong but the story of emerging markets driving growth as developed economies stagnate could be shifting,” IATA director general and chief executive Tony Tyler said. “We are still expecting growth of 5% this year. How that growth is achieved, however, appears to be at a turning point.

“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 Asia markets.”

Australian domestic air travel climbed 4.5% in July, up on the 3.7% growth in June but still below the 5% growth in 2012.

Email the Travel Weekly team at traveldesk@travelweekly.com.au

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