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International traffic growth slow for second straight month in July

written by WOFA | September 25, 2014

A Thai Airways A330 lands at Perth. (Rob Finlayson)
IATA says the Thai market has been impacted by the country’s political turmoil. (Rob Finlayson)

International passenger traffic posted a second straight month of weak growth in July as healthy increases in North America was offset by weakness in the South Pacific, Asia and South America.

The monthly premium traffic monitor report from the International Air Transport Association (IATA) said total traffic grew 2.6 per cent in July, compared with the prior corresponding period.

While it was a slight improvement from the 2.4 per cent growth in June, growth in the past couple of months has been well below the above four per cent increases posted in April and May.

IATA said the slowdown reflected weakness in some large markets, rather than any fundamental weakness in the global demand backdrop.

“The slowdown is largely limited to the within Far East market and markets connected to South America,” the IATA report said.

“Economic and politic turmoil in Thailand has damaged tourism demand over recent months and Malaysia air travel has been impacted by tragedies related to the flag carrier.

“The North America – South America market has been hit by capacity cuts to Venezuela as well as weakness in key economies like Brazil and Argentina.”

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Travel within the “Far East” region rose a slender 0.3 per cent in July, compared with a year ago. It fell 4.2 per cent in June.

IATA, which represents about 240 airlines or 84 per cent of all global airline traffic, said travel in premium seats rose by 3.8 per cent in the first half of calendar 2014, compared with 3.6 per cent for economy travel.

“The share of premium travel still seems to be trending upwards from the low point reached at the bottom of the economic cycle in late 2012,” IATA said.

“The rising share of premium seats has been supported by stronger growth longer-haul markets. This in turn has helped support premium yields, as longer-haul markets drive the greatest share of premium revenues.

“This has helped the financial performance of the longer-haul network airlines, compared to shorter-haul mainly leisure travel focused airlines in some, though not all, regions.”

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