IATA Tracking Mixed Global Air Traffic Trends

Global airline traffic during April grew versus the prior-year period reflecting a generally improved business environment, according to the International Air Transport Association. However, economic conditions and, consequently, passenger traffic trends vary by region, with the United States, Europe and Asia showing signs of stagnation and the Middle East and Latin America maintaining more robust growth rates.

Worldwide April passenger traffic measured in revenue passenger kilometers rose 3.2 percent year over year, following 6.2 percent growth in March that benefitted from the timing of Easter. While international traffic volumes generally increased, "domestic air travel performance shows divergence across markets."

In the United States, domestic air traffic increased 1.1 percent versus April 2012, according to IATA data, with that growth likely constrained by the timing of Easter. IATA noted that when analyzing monthly trends, "it does appear that earlier acceleration is starting to weaken. The growth trend for the U.S. domestic market had been showing strong acceleration since Q4 2012 in line with an improving economic outlook and consumer confidence, but the last few months have shown declines month-on-month, which reflect the recent falls in business confidence."

Across North America, airlines' international passenger traffic in April retreated 0.5 percent year over year, "the only region to experience contraction."

"The economic consequences of the U.S. government spending cuts are yet to be fully seen, but the initial impact on business confidence has been negative with a significant slip in the U.S. Manufacturing Purchasing Managers Index in April," IATA explained.

Direct reports from the largest U.S. airlines showed mixed April traffic results. In the domestic market, American and Delta each reported year-over-year declines of slightly more than 1 percent, while United's drop nearly was 6 percent. Gains came at Southwest (1.5 percent), US Airways (6.6 percent), JetBlue (4.7 percent) and Alaska (8.5 percent). For international operations, American and United reported lower traffic levels (down 0.6 percent and 3.2 percent, respectively) while Delta increased traffic marginally.

Strong Trends In Latin America, Slower Growth In Asia And Europe 

IATA reported strong April traffic growth in Latin America, including a 4.6 percent increase on international routes, "supported by expansion in trade volumes and growth in regional economies." Brazil, however, experienced another month of contraction, with total traffic in that market down 3.4 percent year over year. That decline, according to IATA, "followed significant capacity cuts, with airlines acting to offset downward pressure on profitability from slower than expected economic growth."

In Europe, international traffic in April was up 2 percent year over year, down from the 4.5 percent growth rate in March, partially due to Easter timing and "the weakness in eurozone economies and the subsequent dampening effect on air travel demand."

Asia/Pacific airlines also showed slowing growth, with international traffic in April increasing 2.4 percent year over year following 5.7 percent growth in March. "This softness is consistent with falls in business confidence in major Asian economies as well as recent stagnation in Asian trade volumes," IATA concluded. The group also noted "weakening" domestic China traffic, likely reflecting "sluggishness in both the manufacturing and services sectors." Yet, China's overall traffic trend remained relatively strong, with passenger traffic up 7 percent in April.

In Japan, where passenger traffic in April was down 1.1 percent, "air travel is yet to reflect improvements in economic indicators, which show business confidence and exports on the rise," according to IATA. "Unless there are significant reversals in the economies of major trade partners—Europe and the United States—sustained economic growth in Asia should support expansion in international air travel for the region's airlines."

Meanwhile, Middle Eastern airlines continue to grow most quickly, with aggregate April international traffic up 10.9 percent year over year. "Demand for air travel has benefitted from continued expansion in trade volumes in the Middle East and Africa since late 2011," IATA wrote, "with regional airlines embarking on network and capacity expansion to take advantage of that growth."

Looking ahead, despite some flattening in global air traffic acceleration "largely due to deterioration in the eurozone economy," the association expects global economic growth in 2013 to outpace that of the previous two years, thereby supporting "further growth in air travel demand."