Global passenger traffic grew by 5.4% in February representing a slowdown, compared to January’s increase of 8.2%, cumulative traffic growth for the first two months of 2014 was 6.9%, which compares favorably with the 5.2% overall growth achieved in 2013.

 

“People are flying,” said Tony Tyler, IATA’s Director General and CEO. “Strong demand is consistent with the pick-up in global economic growth, particularly in advanced economies.”

 

IATA says that last month, the UK government recognised the principle that its Air Passenger Duty (APD) was hurting the UK’s economic prospects – particularly its ties with emerging economies such as China, India and Brazil. From next April, the highest bands will be eliminated.

 

‘HALF-HEARTED EFFORT AT BEST’

“This latest effort is half-hearted at best. Instead of immediately addressing the economic damage of this misguided tax, the government will eliminate the highest bands from next year.

 

“The APD is a drag on the UK economy that far outweighs even the billions of pounds that it siphons from the pockets of travelers. The government’s tinkering pays little more than lip service to this fact. It’s time for decisive action. Taxing a necessity like connectivity as if it were a social indulgence hurts the economy. A comprehensive review is needed,” said Tyler.

 

In February, international passenger traffic rose 5.5% compared to the year-ago period. Capacity rose 5.8% and load factor slipped 0.2 percentage points to 76.8%. All regions recorded year-over-year increases in demand.

 

European carriers’ international traffic climbed 5.8% in February YOY, the strongest growth among the three largest regions. Capacity rose 5.7% and load factor was stable at 77.4%.

 

Asia Pacific carriers recorded an increase of 4% YOY. While this was down compared to January traffic growth (8.3%), in part this was owing to the timing of the Lunar New Year, which took place in January, a month earlier than in 2013. While regional economic activity is robust and trade volumes continue to accelerate, business activity has declined for the third month running in China, according to data from JPMorgan/Markit.

 

MIDDLE EAST IN POLE POSITION

North American airlines saw demand rise 2.0% in February over a year ago, a slowdown on the January growth rate (3.7%). The demand backdrop in the region is showing signs of improvement, signaling that air travel should continue to expand in coming months.

 

Middle East carriers had the strongest year-over-year traffic growth in February at 13.4% as airlines continue to benefit from the strength of regional economies and solid growth in business-related premium travel.

The Gulf nations in particular are enjoying acceleration in non-oil sectors of their economies, further supporting strong demand for air travel.

 

 

Latin American airlines’ traffic rose 4.2%, only slightly behind January growth (4.6%) and the outlook is broadly positive with continued robust performance of economies like Colombia, Peru and Chile, and the upcoming demand to be generated by the FIFA World Cup in Brazil.

 

African airlines experienced the slowest demand growth, up 0.1% YOY, with capacity up 4.1%. The weakness over recent months in part could reflect adverse economic developments in some parts of the continent, with the slowdown in the major economy of South Africa, as well as growing competition from airlines based outside the region.

 

“The strong demand for air travel at a time of rising business and consumer confidence is indicative of the symbiotic relationship between aviation and economic growth,” said Tyler.

 

“The connectivity provided by aviation both enables and sustains trade and development, while economic activity creates demand for aviation. Governments that treat aviation as if it were a luxury item–or a necessary evil–are depriving their populations of a key engine of growth and job creation.”