India's domestic air traffic falls 1.1% during July: IATA

India's domestic air traffic falls 1.1% during July: IATA Dubai: Indian domestic air traffic during the month of July fell 1.1 percent compared to a year ago, the worst performance for any market, reflecting the weakening economy among other factors, the International Air Transport Association (IATA) has said.

According to IATA, after expanding at 20 percent plus rates through 2010 and early 2011, the Indian market stopped growing at the end of 2011. "July capacity rose 2.1 percent, dropping the load factor to 69.6 percent from 71.8 percent last year," the association said. Load factor is the ratio of the lift of an aircraft to its weight.

IATA said the global traffic results for July showed slower growth in both air travel and freight, but with considerable variation by region and market.

It said the domestic markets also experienced slow growth, continuing the trend that began early this year. "In total, traffic rose 3.1 percent year-on year, down from 4.2 percent in June. However, the slowdown was not universal, with China and Brazil recording strong growth that was offset by weakness in India and Japan.

"China's domestic market rebounded sharply from the slowdown earlier this year to post 9 percent demand growth in July, up from the 7.8 percent year-over-year growth seen in June. With capacity up 12.1 percent, load factor slipped to 84.1 percent from 86.5 percent last year," the IATA said.

According to IATA data, July passenger demand in aggregate was 3.4 percent higher than the same month last year, compared to a 6.3 percent increase in June and average growth of 6.5 percent over the first half of the year.

This slowdown in travel growth is being driven largely by the recent fall in business confidence in many economies.

"July freight demand was 3.2 percent lower than it was in the same month last year. This is down on the 0.1 percent year-on-year growth rate of June. A large part of that decline was due to a comparison with a relatively strong July last year, but overall the trend in air freight is weak, in line with subdued world trade growth," it said.

Airlines have responded to this slower growth environment by reducing the capacity added to markets, a move which has stabilised load factors at relatively high levels and provided some support for profitability in the face of high fuel prices.

In July, passenger capacity rose 3.6 percent, in line with the expansion of traffic, keeping the load factor at a relatively high 83.1 percent.

"The uncertain economic outlook is having a negative impact on demand for air transport," said Tony Tyler, IATA's Director General and CEO.

The cargo business is 3.2 percent smaller than it was a year ago. And passenger markets ? with the exception of Africa, China-domestic and the Middle East ? saw demand fall from June to July. Overall, passenger demand is still up 3.4 percent on the previous July. But growth trend is clearly slowing. "This, along with rising fuel prices is likely to make it a tough second half of the year," he said.

PTI