July passenger demand in aggregate was 3.4 per cent higher than the same month last year, compared to a 6.3 per cent increase in June and average growth of 6.5 per cent over the first half of the year.
“This slowdown in travel growth is being driven largely by the recent fall in business confidence in many economies,” Iata reported at the end of last week.
Asia-Pacific carriers saw demand growth of just 0.9 per cent in July, a major slowdown from the 5.8 per cent recorded in the June year-on-year comparison.
Only North American airlines fared worse, shrinking by 2.1 per cent in July. The Iata announcement said, “European airlines appear to be benefiting more than Asia-Pacific airlines from the recently stronger trade flows from West to East, while Middle Eastern airlines continue to offer strong competition on long-haul markets.
“The downward growth trend began in the second quarter of 2012 and has now continued into the third.”
In order to stabilise load factors and develop profitability, airlines worldwide have reduced capacity.
“The uncertain economic outlook is having a negative impact on demand for air transport … the growth trend is clearly slowing,” Iata director general and chief executive Tony Tyler said.
“This, along with rising fuel prices, is likely to make it a tough second half of the year.” Iata has been reporting reduced air transport demand since the beginning of the year.
International passenger market growth for June 2012 was up 7.5 per cent on last year, while July results only garnered a 3.5 per cent rise compared to July 2011.
Domestic markets also experienced slow growth, continuing the trend that began early in 2012; traffic rose 3.1 per cent year-on year, down from 4.2 per cent in June. Despite the turbulent global economic climate, China and Brazil recorded strong domestic growth.
“The huge success of the London Olympics was also an important reminder of the vital role that international aviation plays in bringing the world together and facilitating global mega-events,” Mr Tyler said.
“Now all eyes are on Brazil, which will host the 2014 World Cup and the 2016 Olympics, and aviation will play a key role there as well.”