New Delhi: Boosted by robust economic growth in the Asia-Pacific region, the global demand for air travel has risen considerably in the recent past, reaching an all-time high during this normally lean season.
Air traffic growth at 8.6% this August was much higher than it was last year when security scare was witnessed in North America, the International Air Transport Association (IATA) said in its latest revised projection of passenger and freight demand released on 1 October.
Maintaining that this was the “fastest growth rate for 16 months”, the IATA report said the growth reflected “an underlying improvement in travel into the third quarter of 2007, as airlines in Asia-Pacific in particular benefit from traffic generated by robust economic growth in the region.”
International air freight demand grew 6% in August, its “strongest rate of growth in 16 months. The growth for the year till date was only 3.9%, the IATA said.
The world aviation body also revised its forecast for 2007 upward from an industry profit of $5.1 billion to $5.6 billion.
The IATA also said that Asia-Pacific based airlines have added 42% to their passenger carrying capacity, much higher than their counterparts in Europe and North America.
This rise was driven by the massive growth in air traffic in India and China, it said.
Airlines based in Asia-Pacific “preparing to serve the massive opportunities in China and India added 42% to their capacity and improved load factors by two percentage points”.
In contrast, North American carriers added 11% to their capacity and improved load factors by six percentage points, while the Europeans added 29% capacity with five percentage point increase in load factor.
Despite this rise, IATA, in its revised financial forecast for world airlines, said though the global airlines’ balance sheets were improving, the whopping $200 billion “mountain of accumulated debt continues to make civil aviation a fragile industry”.
Stressing that commercial freedom was “a critical missing link”, IATA chief Giovanni Bisignani said, “we must now be looking forward to even broader liberalisation, including ownership.”
Referring to the addition in their capacity worldwide, the IATA study said North American carriers’ increased unit revenues and drove expected net profits to $2.7 billion, the highest among the major regions.
Conversely, poorer yields from Asia-Pacific carriers and sluggishness in cargo markets resulted in a decline in their absolute profits from $1.2 billion in 2005 to $700 million in 2007.
European carriers continued to benefit from the buoyant long-haul markets, improving profitability continuously from $1.6 billion in 2005 to $2.1 billion this year.