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India, Brazil propel global aviation market growth
Posted On: Jun 05, 2011
A file photo.
Recording the strongest growth in the world, India's domestic aviation market has tripled in the past five years, followed by the markets in Brazil and China which doubled during this period.
"Over the last five years, Indian domestic expansion has been the strongest with a tripling in size. China and Brazil doubled in size over the same period," a latest report of the International Air Transport Association (IATA) said.
"The strength in Chinese and Indian markets helped offset the weakness in routes associated with Japan. Japan's international traffic is down 20 per cent, knocking a full one per cent off of total international travel," it said.
India and Brazil showed the strongest domestic growth at 25.6 and 23.8 per cent respectively. "Both are continuing their trend of high-speed growth," the report said, adding China's domestic market saw a decline in growth to 10.8 per cent this April though it remained a robust market.
Growing air traffic in India, Brazil and China has led to a rebound in the aviation market which grew by 16.5 per cent in April despite high oil prices, Iceland volcanic eruption and Japan tsunami and political unrest in West Asia and North Africa hitting international air travel.
In spite of such "significant" growth, the profits of the airline industry were being squeezed by a series of crises and shocks that marked the first four months of this year.
"Their impact on demand will continue to ease as we move into the second half (of this year)," IATA chief Giovanni Bisignani said here, adding "unfortunately two things are spoiling the party -- demand shocks and high jet fuel prices".
On the "significant" growth in demand in April, the IATA Director General and CEO said "we are growing at 3-4 per cent. International traffic is now 7 per cent above the early 2008 pre-recession levels, load factors are hovering around 77 per cent and business confidence is high".
However, the industry was "not shock-proof despite the enormous restructuring over the last decade", Bisignani said.
In its latest financial monitor of the world aviation industry covering April and May, he said airline share prices went up five per cent in May but financial markets were still taking "bearish view of airline financial prospects" as fuel costs remained at an average of 30 per cent of the total costs of airlines.
The IATA estimated the first quarter loss of the airline industry at USD 2.2 billion so far, as the jet fuel prices remained USD 40 a barrel higher than the third quarter last year. Since then, airline profits have been in decline, it said.
Even though air travel rebound after demand shocks, load factors and aircraft hours remained "significantly down, reducing asset utilisation and the ability to sustain profitability", the report said.
The IATA's April traffic results showed a rebound in international markets with 16.5 per cent growth compared to the same month last year.
It the domestic markets showed 4.7 per cent growth over the previous year, pushing the passenger load factor or aircraft seats filled to 78.8 per cent.
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