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PASSENGER DEMAND STAYS STRONG: IATA

The International Air Transport Association (IATA) reports global passenger traffic results for August showing a strengthening of the healthy demand trend of the last few months. Total revenue passenger kilometers (RPKs) rose 6.8% compared to August 2012. Capacity increases over the year-ago period lagged demand at 5.6%. This pushed the load factor to match the record high of 83.4% set in July 2011.

“August was a positive month for passenger travel. Strong demand and capacity discipline saw load factors match the previous record high of 83.4%. The solid performance was also supported by a stabilization of emerging market weakness and renewed confidence in Europe and North America. Trading conditions are still tough with high oil prices, stiff competition and regulatory hurdles. But demand growth remains a bright spot with most indications pointing towards an acceleration in the fourth quarter,” said IATA director general Tony Tyler.

August international passenger demand was up 7.5% compared to a year ago. Capacity rose 5.6% versus August 2012 and load factor climbed 1.5 percentage points to 84%. All regions recorded year-over-year increases in demand. North American airlines saw demand rise 5.1% over a year ago, the slowest growth for any region, but still close to double the year-to-date increase of 2.7%. This is consistent with indicators of a more supportive business environment, although manufacturing activity remains below the average seen at the start of 2013.

The growth in demand for passenger travel highlights the important role that global connectivity plays in today’s world. “Aviation is the lifeblood of the global economy. It’s important for jobs and development that aviation’s growth is sustainable. That’s equally critical for its financial and environmental performance,” said Tyler. “Last week we announced a revised industry outlook. Profits are weak, but moving in the right direction. In 2012 airlines made an average 1.1% net profit margin. That is expected to double to 2.2% in 2014. Cost control, consolidation, joint ventures and product innovations are among the measures that are helping airlines achieve the efficiencies needed to secure their financial futures.”

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