Passenger demand moderates in November

The International Air Transport Association (IATA) global passenger traffic results for November 2013 showing a moderation in the pace of recent demand growth. Total revenue passenger kilometres (RPKs) rose 4.1% compared to November 2012. This was slower than the 6.5% year-over-year growth recorded in October.

In November capacity expanded by 6.1% which out-paced demand growth. This led to a 1.4 percentage point slip in the load factor to 76.3%.

Demand drivers such as consumer and business confidence, however, continue to improve. This suggests that growth may accelerate in the coming months.

"Demand growth hit a speed bump in November. But with continued modest improvements in economic conditions the outlook remains positive," said, IATA, Director General and CEO Tony Tyler.

November 2013 international passenger demand was up 4.8% compared to the year-ago period. Capacity rose 6.3% versus November 2012 and load factor dipped 1.0 percentage points to 75.5%. All regions except Africa recorded year-over-year increases in demand. However, compared to October, all regions reported slower demand growth for November.

Asia-Pacific carriers recorded an increase in demand of 5.5% compared to November 2012. This was supported by the stronger performance of major economies such as China and Japan. With capacity up 6.8% on the previous year, the load factor slipped 0.9 percentage points to 75.4%.

European carriers' demand for international services rose 4.1% in November 2013 compared to the year-ago period. Capacity expanded more quickly at 4.8% leading to a 0.5 percentage point dip in the load factor to 77%. Modest economic improvements and rising consumer and business confidence are supporting the growth in demand.

North American airlines saw demand rise 1.7% over the 2012 period. This was a slowdown on October growth, which was 3.6%. Capacity rose 4.7%, causing load factor to fall 2.2 percentage points to 77.5%. Recent economic indicators have shown a solid fourth quarter, despite the disruption of the government shutdown in October.

Middle East carriers had the strongest year-over-year demand growth at 9.7%. Airlines in the region have benefited from strong growth in business-related premium travel throughout the year, particularly to Africa and other developing markets. Capacity rose 12.8% and load factor slipped two percentage points to 72.1%.

Latin American airlines experienced a 6.9% rise in demand in November, the second strongest growth recorded. Robust expansion in business related travel is being driven by the strong performance of economies such as Colombia, Peru and Chile. Capacity rose 3.6% and load factor climbed 2.4 percentage points to 79.4%, the highest for any region.

Africa was the only region to see a decline in demand: November traffic fell 2% compared to the same month in 2012. Capacity climbed 2.6%, pushing load factor down 3 percentage points to 63.5%, by far the lowest for any region.

Volatility in the air transport statistics rather than the start of a downward trend may have contributed to the lower number, as the demand environment is strong.

Demand for domestic travel rose 3.1% in November 2013 compared to the year-ago period, a significant deceleration versus the October increase of 5.9%.

There was significant variation in performance among markets. Total domestic capacity was up 5.6% and load factor dipped 1.9 percentage points to 77.7%.

US domestic traffic fell 1.2% in November versus November 2012.

This most likely is linked to the timing of the Thanksgiving holiday nearer the end of the month, which caused some traffic associated with the holiday to slip into December.

China's domestic traffic jumped 9.3% compared to the year ago, the strongest performance for any market. The vibrant growth is consistent with the robust economic activity.

Japan saw a 3.3% rise in domestic traffic for November year-over-year, supported by sustained increases in business activity and improving employment rates. Brazil's domestic traffic rose 4.5%, the second consecutive month of solid performance after a difficult first three quarters of 2013.

Indian domestic traffic rose 3.4% in November compared to a year ago, after an 8.6% rise in October, signaling that conditions remain volatile. Russia's November domestic traffic climbed 9.2%. Demand for air travel is being supported by a resilient labour market in line with government policy to maintain high employment and sustained income levels.