IATA predicts ‚Äúimprovement” in 2013

IATA predicts ‚Äúimprovement” in 2013
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Global demand for air travel climbed 5.3% in 2012 but net margins remained under intense pressure, year-end results from the International Air Transport Association have showed.

And while 2013 "will not be a banner year", profitability should improve, it said.

The growth in 2012 was below the 6% seen in 2011 but above the 5% 20-year average, according to IATA.

International demand grew 6% with domestic rising at slightly slower rate of 4%.

Load factors were near record levels of just over 79%.

"Passenger demand grew strongly in 2012 despite the economic bad news that dominated much of the last 12 months," IATA director general and chief executive Tony Tyler said.

The high load factors demonstrated the "extreme care" airlines managed capacity growth during the year, he added.

But Tyler warned that while growth was solid and despite expected combined profitability of $6.7 billion, issues remained.

"With a net profit margin of just 1% the industry is only just keeping its head above water," he said.

In Asia Pacific, IATA recorded passenger growth of 5.2%, up on the 4% the previous year although the 2011 performance was impacted by the tsunami in Japan.

The region accounted for a fifth of total industry growth with the fourth quarter boosted by a revival in the Chinese economy.

Capacity in Asia Pacific increased 3% with load factors at a healthy 77.5%.

Tyler said IATA was approaching 2013 with "guarded optimism".

"Business confidence is up, the Eurozone situation is more stable that it was a year ago and the US avoided the fiscal cliff," he said. "There is no end in sight for high fuel prices and GDP growth is projected at just 2.3%. But improved business confidence should help cargo markets to recover the lost ground from 2012."

He predicted that passenger growth should be around the 5% mark.

"2013 will not be a banner year for profitability but we should see some improvement on 2012," Tyler said.

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