'Substantial volatility in growth rates of India's domestic air traffic'
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'Substantial volatility in growth rates of India's domestic air traffic'

Last Updated: Wednesday, July 03, 2013, 19:01
 
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'Substantial volatility in growth rates of India's domestic air traffic'
New Delhi: India's domestic air traffic grew 3.5 percent in May, but the growth has not been consistent due to "substantial volatility", the IATA said Wednesday.

The traffic rose 3.5 percent against a 0.3 percent decline in capacity that caused load factor to rise three percentage points to 81.6 percent, the global passenger traffic results compiled by the International Air Transport Association (IATA) showed.

"The May result is a rebound on April, when the market had contracted. In fact, there has been substantial volatility in growth rates over recent months.

"Reductions in domestic fares had resulted in stronger demand in March and possibly again now in May, but this trend has not been consistent and when coupled with a weak economic backdrop, a growth trend is difficult to establish," the IATA analysis of Indian domestic traffic figures said.

The results for global passenger markets showed a growth of 5.7 percent to the year-ago period, while global traffic carried by Asia-Pacific airlines rose only 3.7 percent.

"The softness in demand is consistent with fall in business confidence in major Asian economies as well as a slowdown in trade growth momentum. In particular, GDP growth in China did not meet expectations in the first quarter and business confidence has slipped to levels indicating contraction in manufacturing activity," the analysis said.

Commenting on the growth pattern and the airline industry's profitability, IATA's Director General and CEO Tony Tyler said world airlines were expected to make USD 12.7 billion profits on USD 711 billion in revenues.

"That's a 1.8 percent net profit margin, or around USD four profit for every passenger. The average profit per passenger is just enough to buy a sandwich in most parts of the world.

"Aviation will have to do much better than that in order to attract the USD 4-5 trillion in capital investment that will be needed over the next 20 years to meet the demands for aviation-enabled connectivity," Tyler said.

PTI


First Published: Wednesday, July 03, 2013, 19:01


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