Global Air Traffic Ticks Up
Global air traffic continues to increase, according to the International Air Traffic Association (IATA), increasing 3.2% in April 2013 over April 2012. This extends the trend of positive passenger demand that has been developing since late 2012, said Tony Tyler, IATA’s director general and CEO. Much of the increase, however, was in emerging markets. Airlines in Europe and North America reported modest expansion compared with strong growth in Africa, Asia and the Middle East. Tyler said that while it’s important to keep an eye on what’s happening with European and North American economies, “most indicators continue to signal further expansion in air travel,” he said. (Source: IATA press release).
Aviation Financial Forecast Brightens
IATA has upgraded its financial forecast for the aviation industry, projecting that the industry will generate net post-tax profits of $12.7 billion, up from the $10.7 billion it forecast in March. The reason for the upgrade is because oil prices are lower this year, partly because of softer growth expectations but partly because of new supply from the U.S. IATA sees the biggest improvement in the U.S. That’s because consolidation through mergers domestically and joint ventures on the North Atlantic have off-set difficult market conditions. Although IATA expects to see some benefits from a moderate acceleration in economic growth, it sees structural change and airline efficiency measures to be more important drivers for aviation performance this year. (Source: IATA).
Summer International Air Travel Numbers Could Hit Record High
Airlines 4 America, the industry’s trade group, estimates that more people will fly this summer than last year and a record number will fly internationally. A4A said U.S. airlines will carry nearly 209 million passengers globally from June through August, up 1% over 2012. That includes 27 million international passengers, a record number. This is the largest summer volume for U.S. carriers since 2008, when more than 210 million people traveled. The all-time high was 217 million fliers in the summer of 2007. (Source: A4A press release).
Cutting Through the Fog at Airports
Federal Aviation Administration has instituted a new NexGen procedure that means aircraft can now land safely when visibility is lower than in the past. Instrument Landing Systems (ILS) guide aircraft on their approach to runways when visibility is low. At Detroit Metropolitan Wayne County Airport, this means that aircraft can approach when visibility is at least 1,800 feet instead of the old minimum of 2,400 feet. This new procedure is being used for more than 500 existing ILS approaches airports, including New York LaGuardia and Newark International. Planes have to be equipped certain equipment to use the new process. The result: a smoother flow of air traffic and saving millions of dollars in flight diversion and cancellation costs. (Source: FAA blog).
Airlines Reap $27 Billion in Reported Ancillary Fees
Airlines reported collecting $27.1 billion in ancillary fees in 2012, up 19.6% from a year earlier and double the amount of ancillary revenues airlines collected in 2009. The top ten airlines are major carriers, including United Airlines ($5.3 billion), Delta Air Lines ($2.8 billion) and American Airlines ($2 billion). Airlines are making these ancillary services available through more channels, including the global distribution systems (GDSs) that travel agents use, according to IdeaWorks, which tracks airline ancillaries. “The most aggressive airlines can easily have more than 20% of their revenue produced by a la carte fees,” said Jay Sorensen, president of IdeaWorks. He added that some airlines gain more than $30 per passenger in ancillary revenue. (Source: IdeaWorks press release).
