IATA reports demand for air travel stays firm but with regional variations

The International Air Transport Association (IATA) announced global passenger traffic results for April showing a 3.2% increase in demand over the previous April. Emerging markets are continuing to lead air travel growth, with all regions reporting year-over-year gains.

The timing of the Easter holiday (which occurred in March 2013 and in April 2012) is largely responsible for the apparent decline from March performance (when year-on-year demand showed a 6.2% increase). The seasonally adjusted rate for April showed demand up almost 5%, which is in line with the long term historical trend.

“Passenger demand continued to grow in April, extending the positive trend that has been developing since late 2012. The increase, however, is concentrated in emerging markets. Airlines in Europe and North America reported a modest expansion compared to the strong growth seen in Africa, the Middle East and Asia.

“While economic developments in Europe and the US certainly bear watching, most indicators continue to signal further expansion in air travel,” said Tony Tyler, IATA Director General and CEO.

Capacity rose 4.4% on the previous April which was slightly ahead of demand. This pushed the industry load factor downwards by 0.9 percentage points to 78.1%. If we adjust for the impacts of seasonality, the load factor remained near record highs of 80%.

Air France and KLM launch inflight Wi-Fi

Today Air France and KLM Royal Dutch Airlines will operate their first inflight connectivity flights with Wi-Fi on board. The new service will allow customers to remain connected with the world by being able to send text messages and e-mails and surf the internet during their flight. On our specially designed inflight website we also offer a broad range of free and up to date services including live television news and sports channels, relevant airline and destination information.

ONLINE ACCESS
In partnership with Panasonic Avionics, Air France and KLM will conduct a trial phase throughout the rest of 2013 on two Boeing 777-300s. During that time, customers can connect to the internet using their Wi-Fi enabled smartphones, laptops or tablets at a fixed rate and use their mobile phones for text messages or email, no matter what travel class they are in. The two Wi-Fi equipped aircraft will operate on several long-haul destinations during the trial.

FARES
During the pilot phase we will offer hourly and full-flight fees: EUR 10.95 per hour or EUR 19.95 for the full flight, applicable for all classes. These fees are in line with industry average. Travellers can pay for their internet access by credit card. Mobile phone usage (for text and data) will be billed to the phone users according to their own roaming agreements. Access to the inflight website will be free of charge.

Wireless service — whether the on-board portal or satellite internet — will commence once the flight has reached 20,000 feet, shortly after take-off.

CUSTOMERS’S EXPERIENCE
With the inflight connectivity test, Air France and KLM are adapting to their customers’ new travel habits, while also surprising them with new services. During this test phase, customers will be asked to share their comments, suggestions and expectations and therefore contribute to the improvement of these services.


“By jointly launching inflight Wi-Fi and data transmission, Air France and KLM are continuing to innovate. This inflight connectivity test phase on long-haul flights perfectly integrates our ongoing strategy to offer our customers even more new products and services.” stated Alexandre de Juniac, Chairman and CEO of Air France.

“Connectivity is a significant investment in a brand new area where technology is still under development.” says KLM President & CEO Peter Hartman. “Being permanently connected is part of our customers’ daily lives. We are aiming to define the best possible product and system to fit their needs and wishes. We’re confident that, in the future, all our passengers will be able to remain connected when travelling to and from our hubs at Paris Charles de Gaulle and Amsterdam Airport Schiphol.”

TAP Portugal expands African operations

TAP has more than tripled the scale of its operations in Africa over the last 10 years, rising from a total of 22 flights per week to that continent in 2003 to 71 from this October with the launch of two new destinations: Tangiers in Morocco and Boa Vista in Cape Verde.

The number of African destinations served by TAP has risen from seven in 2003 to 15. From carrying 269,000 passengers in 2003, the company grew to carry 675,000 in 2012.

From October TAP will begin offering twice weekly flights to the island of Boa Vista in Cape Verde and five flights per week to the Moroccan city of Tangiers.

Tangiers will join Casablanca and Marrakesh as Moroccan destination to which TAP flies. With the opening of this route, and with the planned increase in capacity to Casablanca, the total number of seats TAP will offer each week between Portugal and Morocco will increase by 50 per cent.

In 2012 TAP carried 47,000 passengers to its Moroccan destinations, a 30 per cent rise on the previous year.

Boavista is the new destination in Cape Verde, adding to TAP’s existing flights to Sal, Praia and Sao Vicente. With the introduction of the twice weekly flights to Boa Vista, TAP will offer a total of 15 flights to the country, rising to 17 in the high season. After Angola, Cape Verde is TAP’s busiest African destination.

During the first quarter of 2013 TAP registered a 2.5 per cent rise in traffic across all of its African routes, with the load factor increasing 2.6 percentage points to an average of 72.5 at the end of March.

IATA AGM Opens in Cape Town

The International Air Transport Association (IATA) opened its 69th Annual General Meeting (AGM) and World Air Transport Summit in Cape Town, South Africa today. The meeting kicked-off with strong calls for African governments to take full advantage of aviation as a catalyst for growth and development.

“Nowhere is the potential for aviation greater than on the African continent—the home to a billion people spread across 20% of the world’s land mass. Economic reforms and political stability have spurred growth and development. South Africa is the newest member of the BRICS grouping of states.

And the 50th anniversary of the African Union reminds us of its vision for an integrated, prosperous and peaceful Africa, driven by its own citizens and representing a dynamic force in the global arena. Aviation is well placed to contribute to these and the other long-term goals so vital to the development of Africa,” said Tony Tyler, IATA’s Director General and CEO.

The AGM was opened with formal addresses from the Deputy President of the Republic of South Africa, Kgalema Motlanthe; and the Minister for Public Enterprise of the Republic of South Africa, Malusi Gigaba. In the opening session, Acting Chief Executive Officer of South African Airways, Nico Bezuidenhout was elected President of the AGM.

“Global connectivity—enabled by aviation—has a very powerful role to play both in integrating the 54 national economies of Africa and in connecting them to the world. With a few kilometers of tarmac, even the most remote destination becomes a part of the global community. But this will require the commitment of governments to solve some major issues,” said Tyler.

Safety is the biggest challenge facing African aviation. “IATA’s 20 Sub-Saharan members are performing in line with the global average on safety as are the 24 Sub-Saharan airlines that have met the 900+ standards of the IATA Operational Safety Audit (IOSA).

But if we look at the entire African industry, safety remains a challenge with an overall accident rate many times the global average. This AGM is an opportunity to send a clear signal to the region’s governments that world class safety is possible in Africa and that we support their commitment to achieving it by 2015,” said Tyler.

Other key issues in Africa include:

Costs: The high cost operating environment in Africa places the continent’s airlines at a competitive disadvantage that impedes the important role that aviation connectivity could play.

Fuel: Fuel costs are 21% more expensive in Africa than the global average. Government policies towards aviation in Africa tend to see it as an “elite” product, rather than as a critical component of the continent’s economic infrastructure.

As a result, it is heavily taxed—often in violation of International Civil Aviation Organization principles that prohibit the taxation of jet fuel for international operations. Moreover, despite high infrastructure charges, the failure to invest in fuel supply infrastructure has resulted in frequent supply disruptions that cripple the operations. Angola (1), Ghana (2) and Uganda (3) have begun to address fuel issues, setting a good example of progress.

Taxation: Africa also suffers the impact of onerous direct taxes on tickets. Solidarity taxes, tourism taxes, VAT, sales taxes and infrastructure levies and taxes all make connectivity more expensive. This limits the power of aviation to drive economic growth, which would be a much greater source of revenue for governments.

Liberalization: African economic growth will demand better connectivity—integrating African economies and connecting them to world. This must be better enabled by government policies.

Aviation already has a significant footprint in Africa—supporting $67 billion in economic activity annually and 6.7 million jobs. In South Africa, aviation supports some 350,000 jobs and contributes approximately ZAR 74 billion to South African GDP.

The AGM is attended by some 700 aviation leaders representing IATA’s 240 member airlines, their partners and stakeholders.