Air demand up but margins ‚Äúvery weak”

Air demand up but margins ‚Äúvery weak”
By admin

Demand for international air travel climbed 5.6% in November, with Asia Pacific leading the way.

Latest figures from the International Air Transport Association (IATA) show regional growth of 6.2%, although some of the increase was attributed to depressed results in November 2011 due to flooding in Thailand.

Tony Tyler, IATA director general and chief executive, said global growth has held up well in adverse economic conditions.

"But the current level of air travel is just 2% higher than at the start of the 2012. This is considerably weaker than the long-term growth rate," he warned.

Tyler also reiterated concerns over the industry's margins.

"The expected margin in 2013 of 1.3% is very weak," he said. "Furthermore, current returns on investment are less than half the industry's cost of capital, which continues to erode shareholder value."

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