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Passenger growth continues to slow

IATA reports that June traffic results continue to show a slowing of growth in line with the weakness in business and consumer confidence. Year-on-year, demand for air travel in June expanded by 6.2%. Capacity grew by a much more cautious 4.5% leaving load factors at 81%. While this appears to be a healthy growth rate, the growth trend since early 2012 has seen a slowdown. IATA points to the February through June trend to illustrate its point, observing that during that time, there was a 2% annualized growth. That is a major slowdown from the 8% annualized growth rate experienced from mid-2011 through to January 2012. Tony Tyler, IATA’s director general and CEO, commented: “The uncertainty that we see in the global economic situation is being reflected in air transport’s performance. Although there are some pockets of solid performance, it is difficult to detect a strong trend — positive or negative — at the global level. Passenger markets have been growing more slowly since the beginning of the year and freight markets gains have been mostly very weak. The net effect is a demand limbo as consumers and businesses hedge their spending while awaiting clarity on the European economic front.” In other news from IATA, it welcomed the positive outcome of the Washington meeting (31 July -1 August) where 17 of the world’s largest aviation powers convened to discuss constructive steps towards a global deal under the International Civil Aviation Organization (ICAO) to address international aviation emissions. As expected they reaffirmed their continued strong opposition to the EU’s unilateral and extra-territorial inclusion of international aviation in the European Union Emissions Trading Scheme (EU ETS). The 17 non-EU governments agreed to pursue the goals of the ICAO Assembly’s 2010 Resolution, including the aspirational goal of carbon-neutral growth from 2020. On the development of Market-Based Measures (MBMs), the group reconfirmed its desire to continue to explore the feasibility of a global MBM scheme, while recognizing the need to prioritize work on developing a framework for such a scheme. Separately, IATA also welcomed the passage of a Bill in the United States Senate Commerce Committee to prohibit US carriers from participating in the EU ETS. Significantly, the Bill passed with unanimous bi-partisan support and makes specific provision for officials to use their authority to conduct international negotiations to pursue a worldwide approach to address aircraft emissions. The global aviation community is encouraged to see that in spite of the EU’s insistence on defending its divisive scheme, governments outside Europe recognize the tremendous socio-economic benefits from aviation and are making determined efforts to find common ground to deliver a global solution through ICAO that is acceptable to all. Go to http://www.iata.org for more.

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