African airlines' August pax traffic up 5.4% on 2012 as freight continues downward trend.

The International Air Transport Association (IATA) announced global passenger traffic results for August showing a strengthening of the healthy demand trend of the last few months. Total revenue passenger kilometers (RPKs) rose 6.8% compared to August 2012. Capacity increases over the year-ago period lagged demand at 5.6%. This pushed the load factor to match the record high of 83.4% set in July 2011. In terms of its Passenger traffic results, African airlines’ traffic climbed 5.4% compared to August 2012. Meanwhile August international air freight demand was up 3.6% on the previous year. That is considerably better than year-to-date performance of a 0.7% expansion. However, African carriers' cargo experienced another decline in freight volumes, down 9.7%.
Passenger Trend

August & September 2013 Pax Figures © AFRAA 

August 2013 Int Pax Market © IATA

August 2013 Total Pax Market (Int + Dom) © IATA

August international passenger demand was up 7.5% compared to the year-ago period. Capacity rose 5.6% versus August 2012 and load factor climbed 1.5 percentage points to 84.0%. All regions recorded year-over-year increases in demand

“August was a positive month for passenger travel. Strong demand and capacity discipline saw load factors match the previous record high of 83.4%. The solid performance was also supported by a stabilization of emerging market weakness and renewed confidence in Europe and North America. Trading conditions are still tough with high oil prices, stiff competition and regulatory hurdles. But demand growth remains a bright spot with most indications pointing towards an acceleration in the fourth quarter,” said Tony Tyler, IATA’s Director General and CEO.
African airlines’ traffic climbed 5.4% compared to August while capacity rose 6.5%, resulting in a 0.7 percentage point dip in load factor to 70.9%. Africa was the only region to see a decline in the load factor. African airlines’ traffic climbed 5.4% compared to August last year while capacity rose 6.5%, resulting in a 0.7 percentage point dip in load factor to 70.9%. Africa was the only region to see a decline in the load factor.

Cargo & Freight Trends

August 2013 Cargo Figures © IATA

Global demand for air freight began increasing slowly from April, in line with strengthening business confidence, as economic performance in Europe and the US showed signs of improvement. The Eurozone economy, for example, stabilized in the second quarter of 2013 and import volumes have improved. A strong upswing, however, would require a significant improvement in the cargo performance of airlines in the Asia-Pacific region. They are the largest players in global air cargo with a collective 38% market share. Their year-on-year performance for August was basically flat (-0.2%).

“There are some signs of improvement in demand, but the air freight business remains very tough. Freight volumes are only now reaching the levels of 2011 when the cargo business peaked with revenues of $67 billion. This year we expect $59 billion of revenues from air cargo globally. That takes the top line back to 2007 levels. But to earn that revenue, we will be moving nearly 17% more cargo and dealing with a 40% hike in jet fuel. The road ahead will be challenging,” said Tony Tyler.
African carriers experienced another decline in freight volumes, down 9.7%. After a positive start to 2013, African air freight growth has slowed and is now up by just 0.7% for the year to date. Despite healthy trade volumes and strong growth in many African countries, African airlines face intense competition on key trade routes.

The Bottom Line

The growth in demand for passenger travel highlights the important role that global connectivity plays in today’s world.

“Aviation is the lifeblood of the global economy. It’s important for jobs and development that aviation’s growth is sustainable. That’s equally critical for its financial and environmental performance,” said Tyler.
“Last week we announced a revised industry outlook. Profits are weak, but moving in the right direction. In 2012 airlines made an average 1.1% net profit margin. That is expected to double to 2.2% in 2014. Cost control, consolidation, joint ventures and product innovations are among the measures that are helping airlines achieve the efficiencies needed to secure their financial futures,” said Tyler.
“This week we have a golden opportunity to secure a major step forward on environmental sustainability at the 38th Assembly of the International Civil Aviation Organization (ICAO). It is critical that the Assembly agree a way forward on a single market-based measure (MBM) to support the shared commitment of industry and governments to carbon-neutral growth from 2020. Interim regional schemes will only serve to distract policymakers and the industry at a time when we should be focused on the big picture. Finding a way forward on a global mechanism will be an historic achievement that keeps aviation at the forefront of industries managing their climate change impact,” said Tyler.
At its 2013 Annual General Meeting, IATA members overwhelmingly supported a resolution calling for the implementation of a global mandatory carbon offsetting scheme from 2020.

Download the full August 2013 Global Passenger Traffic Report here.

Download the full August 2013 Global Cargo Traffic Report here.