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STAYING STRONG

The International Air Transport Association (IATA) reports global passenger traffic results for March showing strong demand growth led by emerging markets with all regions showing gains. Total traffic rose 5.9% compared to March 2012. Part of the rise may be attributable to traffic related to the Easter holiday, which occurred in March this year versus April 2012. But the seasonally adjusted trend continues to show strong growth, with demand expanding at an 8% annualized rate in the six months since October 2012. Capacity rose 3.5% compared to the year-ago period, pushing up load factor 1.8 percentage points to 80.3%. “Strong demand for air travel is consistent with improving business conditions. Performance, however, has been uneven. Mature markets are seeing relatively little growth while emerging markets continue to show a robust expansion,”said IATA director general Tony Tyler. “Although oil prices have softened in recent weeks, they remain high against historical averages. In view of this, airlines are responding with a very cautious approach to capacity management.”March international passenger demand rose 6% compared to the year-ago period, with capacity up 3.5%, pushing up load factor 1.8 percentage points to 79.9%. Compared to February, traffic rose 0.4%. The strongest growth occurred in the emerging markets of Latin America and the Middle East. North American airlines’ international traffic rose 2.4% year-on-year in March (after rising just 0.3% in February). This was the slowest rise among the regions, in part owing to a 0.9% reduction in capacity. Load factor rose 2.6 percentage points to 83%, the highest for any region. “Business confidence levels continue to foreshadow an economic upturn. It is important that governments avoid placing roadblocks to recovery. The flight delays and cancellations inflicted on air travellers to, from and within the US owing to sequestration-related budget cuts had the potential to inflict real damage to the economy if they had been permitted to continue,”said Tyler. “Fortunately Congress and the Obama Administration put aside partisan political disputes for the good of the economy. But aviation is far too important to be treated as a bargaining chip in political disputes in the first instance. Let’s hope that lesson is well learned.”He added, “The next challenge is to knock back the $5.5 billion in added taxes and charges in the Administration’s budget proposal, which represent a 29% increase over the $19 billion in fees and taxes that airlines and air travellers paid last year. Under such conditions, the natural ability of aviation connectivity to catalyze economic growth and jobs is compromised.”

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