Record number of airline passengers in 2014

getAsset.aspxBy Phil Davies,

Global airline passenger demand rose 5.9% last year with record carryings of 3.3 billion compared to 2013, latest Iata figures show.

The performance was above the 10-year average growth rate of 5.6% and the 5.2% growth seen in 2013.

Capacity rose 5.6% last year, with the result that load factor climbed 0.2 percentage points to 79.7%.

More than half of the growth in passenger travel occurred on airlines in emerging markets including Asia-Pacific and the Middle East.

A pick-up in Chinese domestic travel, which expanded by about 11% in 2014, helped drive the growth in recent months.

Iata director general and chief executive Tony Tyler said: “With a 5.9% expansion of demand, the industry out-performed the 10-year average growth rate.

“Carriers in the Middle East posted double-digit growth while results in Africa were barely above previous-year levels.

“Overall, a record 3.3 billion passengers boarded aircraft last year – some 170 million more than in 2013.”

But he added: “While it is clear that people will continue to travel in growing numbers, there have been signs in recent months that softening business confidence is translating into a levelling off of international travel demand.

“In the aftermath of the Greek elections and the intensifying debate on how to deliver a dynamic economic program for Europe, we must not forget the power of air connectivity to create growth.

“Governments can kick-start economic development by reducing the passenger taxes that depress demand for air transport, costing jobs and prosperity.

“There are some positive signs. The Scottish government is promising to cut its air passenger duty by 50%. And Austria’s air transport levy is being evaluated as part of comprehensive tax reforms. Scrapping the Austrian levy alone could create some 3,300 jobs.

“That should help convince politicians in these countries to move from considering reductions to delivering results.

High taxes, onerous regulation and infrastructure limitations make Europe a tough place to run an airline.

“A continent-wide commitment to address these issues so that aviation can play its critical role as an economic catalyst would be a powerful signal that Europe’s politicians really do mean business,” said Tyler.

Sourced by Travel Weekly


Iata boss cites APD as worst example of excessive taxation

Iata boss cites APD as worst example of excessive taxationTaxation of European aviation is now around $40 billion a year, twice that of the Asia-Pacific region, according to Iata chief Tony Tyler.

In a speech to the European Regional Airlines Association general assembly in Barcleona, he described the UK’s Air Passenger Duty as “the most egregious example of excessive taxation”.

The Iata director general and chief executive warned that taxes in Germany, Austria and elsewhere continue to hold back air connectivity.

But new tax proposals keep emerging, with Portugal and Sweden suggesting new levies on passengers in the last two months alone.

“Despite this situation, I do see a glimmer of light at the end of the tunnel. Parts of Europe are slowly waking up to the economic consequences of disproportionate aviation taxation.” Tyler said.

The Irish government’s decision to scrap its passenger charge was “significant”.

Tyler said: “Aside from the benefit to the Irish economy itself, it also keeps the pressure on Northern Ireland to keep its low rates of APD.

“The Scottish government is likely to get further tax powers following the recent close independence referendum, and freedom to set a lower APD rate is one of their requests.

“Even the minor improvement that was announced to the APD banding earlier this year, dismal tinkering as it was, shows that the arguments are moving in our direction.

“So despite it sometimes feeling like we are banging our heads against a brick wall, I believe we are making some progress on this issue.”

But he urged the aviation industry “to keep arguing for a new mind-set from European leaders” to focus them on building a strong airline sector.

“If governments and industry work hand in hand to promote connectivity then the ability of aviation to act as an economic engine will be enhanced,” said Tyler.

“How can this be achieved? If you look across the world at the places where aviation is an undoubted success story, certain basic points are common. Governments encourage the development of world-class infrastructure and a regulatory and fiscal framework that facilitates, rather than frustrates, air connectivity.

“In Europe, by contrast, almost the opposite case holds. Infrastructure development moves at a snail’s pace: Eurocontrol estimates that there will be a shortfall of 12% – around 2 million flights – in airport capacity by 2030.

“Next year we will see a crucial decision on the future of runway capacity in the South of England.

“Germany has several airport issues, including the continuing problems in Berlin and the decision to prevent expansion at Munich.

“There are 93 slot-constrained airports in Europe, which speaks to the severity of the looming capacity crunch. And let’s remember that every flight which cannot happen because of limited capacity is full of lost economic opportunities.

“Finding a political and social consensus for the expansion of aviation is absolutely essential for our industry and the economic development of the world.”

Sourced from Travel Weekly

Decline in premium air travel growth recorded

Iata chief hits out at APD ‘tinkering’

Air Passenger Duty remains a “drag” on the UK economy and planned changes to long-haul bands from next year are “half-hearted at best”.

Criticism of the government’s air tax came from Iata director general and chief executive Tony Tyler, who called for a comprehensive review of APD rather than just “tinkering” with the system.

“Last month, the UK government recognised the principle that its onerous APD was hurting the UK’s economic prospects – particularly its ties with emerging economies such as China, India and Brazil,” Tyler said.

“From next April, the highest bands will be eliminated. This followed reductions agreed last year to address the economic damage that APD was doing to Northern Ireland. But despite these adjustments, planned annual inflation-related increases continue.

“This latest effort is half-hearted at best. Instead of immediately addressing the economic damage of this misguided tax, the government will eliminate the highest bands from next year.

“APD is a drag on the UK economy that far outweighs even the billions of pounds that it siphons from the pockets of travelers.

“The government’s tinkering pays little more than lip service to this fact. It’s time for decisive action. Taxing a necessity like connectivity as if it were a social indulgence hurts the economy. A comprehensive review is needed,” said Tyler.

He spoke out as the organisation revealed that demand for global air travel reduced in February over the previous month but still showed an improvement over the start of 2013.

Growth in demand was 5.4% against 8.2% in January with international passenger traffic up by 5.5%.

“Although this represented a slowdown compared to the January traffic increase of 8.2%, cumulative traffic growth for the first two months of 2014 was 6.9%, which compares favorably with the 5.2% overall growth achieved in 2013,” Iata reported.

All regions except Africa experienced positive traffic growth.

“People are flying. Strong demand is consistent with the pick-up in global economic growth, particularly in advanced economies.” said Tyler.

Sourced by Travel Weekly

Iata figures show aircraft accident deaths have halved

Iata figures show aircraft accident deaths have halved

The number of deaths from aircraft accidents was almost halved last year to 210, new official data shows.

The decline from 414 fatalities in 2012 is likely to rise again this year following the loss of the Malaysia Airlines flight MH370 which was carrying 239 passengers and crew.

Iata’s 2013 commercial aviation safety performance figures show that there was the equivalent of one accident for every 2.4 million flights.

There were 81 accidents, up from 75 in 2012, including 16 which were fatal.

However, more than three billion people flew safely on 36.4 million flights – 29.5 million by jet, 6.9 million by turboprop.

Iata director general and chief excutive Tony Tyler (pictured) said: “Safety is our highest priority. The aviation industry is united in its commitment to ensure continuous safety improvement. Importantly, that commitment has made flying ever safer.

“Accidents, however rare, do happen. We release this data as the world continues to focus on the search effort for MH370. The airline industry, its stakeholders and regulators are in the beginning of the journey to unravel this mystery, understand the cause and find ways to ensure that it never happens again.”

Runway excursions, in which an aircraft departs a runway during landing or take-off, are the most common type of accident, accounting for 23% of all accidents over the past five years.

“Survivability of such accidents is high, representing less than 8% of fatalities over the previous five years. Improving runway safety is a key focus of the industry’s strategy to reduce operational risk,” Iata said.

Africa saw significant progress in safety last year with only one western-built jet hull loss, while the region’s accident rate for all aircraft types improved nearly 50% to 7.45 accidents per million flights from 14.80 in 2012.

But Tyler said: “Africa’s overall rate is still many times worse than global levels, so there is plenty of work to do. We cannot take the recent improvement trend for granted.

“To make these gains a sustainable foundation on which to achieve world-class safety levels is going to require the continued determination and commitment of all stakeholders, including governments.”

Sourced from Travel Weekly

Iata lowers 2014 profit projection

Iata lowers 2014 profit projectionBy Phil Davies
Iata today revised downwards its airline industry outlook for 2014 to an overall profit of $18.7 billion from the previously forecast $19.7 billion.Higher oil prices were cited as the main reason, with rates now expected to average $108 per barrel – $3.5 above previous projections.

The $3 billion added cost on the industry’s fuel bill is expected to be largely offset by stronger demand, especially for cargo, which is being supported by a strengthening global economy, according to Iata. Fuel currently accounts for some 30% of the average airline costs.

Overall industry revenues are expected to rise by $2 billion to $745 billion.

Passenger demand growth of 5.8% is expected this year, slightly weaker than the previously forecast 6%, but an improvement on the 5.3% growth for 2013. Passenger yields are expected to deteriorate by 0.3%.

The average fare per departing passenger is anticipated to be about $181 this year, with ancillary services potentially adding almost $14 on top.

Pilot projects continue to be launched in anticipation of the expected US Department of Transportation approval later this year of Iata’s New Distribution Capability.

“Modernising distribution standards will enable airlines to develop further innovations which enhance consumer choice and add value to the travel experience,” Iata said.

Director general and chief executive Tony Tyler said: “In general, the outlook is positive. The cyclical economic upturn is supporting a strong demand environment. And that is compensating for the challenges of higher fuel costs related to geo-political instability.

“Overall industry returns, however, remain at an unsatisfactory level with a net profit margin of just 2.5%.”

The aviation industry retains on average $5.65 per passenger in net profit against $2.05 in 2012 and $4.13 in 2013 but below the $6.45 achieved in 2010.

“The efficiencies of improved industry structure through consolidation and joint ventures is providing more value to passengers and helping airlines to remain profitable even in difficult trading conditions,” said Tyler.

“But we still need governments to understand the link between aviation-friendly policies and broader economic benefits. In many parts of the world the industry’s innate power to drive prosperity through connectivity is compromised by high taxes, insufficient infrastructure and onerous regulation.”

Sourced from Travel Weekly

Flight demand accelerates, says Iata


Demand for flights has continued to “accelerate” during the first few weeks of 2014 helped by improving economic conditions around the world.

International Air Transport Association (Iata) figures show that worldwide passenger traffic in January grew by 8% as measured by total revenue passenger kilometres (RPKs), compared to the same month in 2013. This was up from the 5.2% rise in RPKs recorded during the whole of 2013.

Capacity also rose by 6.7% year-on-year in January while load factor improved by 0.9 percentage points to 78.1%.

Iata chief executive Tony Tyler said: “2014 is off to a strong start, with travel demand accelerating over the healthy results achieved in 2013, in line with stronger growth in advanced economies and emerging market regions.”

European airlines saw international air travel demand rise by 6.4% in January which Iata said was down to “modest” economic improvements in the Eurozone and “rising consumer and business confidence”.

Capacity across the continent increased by 5.9%, as measured by available seat kilometres (ASKs), while load factors picked up by 0.4 points to 77.2%.

The biggest rises in demand came in the Middle East where airlines saw international RPKs soar by 18.1% in January while Asia-Pacific carriers recorded an overall 8% increase in traffic.

North American airlines experienced a 3.5% increase in January while those in Latin America saw a 4.4% rise. African traffic was up by just 2.7% – the slowest rate of growth of any region.

Tyler added: “The second century of commercial aviation has begun on a positive note, with air traffic demand rising in line with generally positive economic indicators.

“While this is in line with an improved overall outlook for 2014, aviation remains highly vulnerable to external shocks. Rising geopolitical tensions around the world have the potential to cast shadows on this optimistic outlook.”

Sourced from TTG Digital