African airlines show positive traffic growth

Cape Town - African airlines experienced their fifth consecutive month of positive traffic growth in November, posting a 12.2% rise compared to November 2014, the International Air Transport Association (Iata) said on Tuesday.

However, the trend for the year-to-date so far remains weak, with growth of just 1.3% reflecting adverse economic developments in parts of the continent, including in Nigeria, which is highly reliant on oil revenues.

Over the past few months, exports from Africa have held up better than they did earlier in 2015, and this could be helping boost international air travel on the region’s carriers, according to Iata. Capacity rose 9.8% and load factor rose 1.5 percentage points to 65.1%.

The global passenger traffic results for November show continued strong traffic growth above the 10-year average rate of 5.6%. Total revenue passenger kilometres (RPKs) rose 5.9% compared to the same period the previous year.

Although below the October rate of 7.1%, this largely was owing to the impact of factors that are expected to be short-lived, including the cessation of operations by Transaero, Russia’s second largest carrier, and labour strikes at Lufthansa, according to Iata.
 
"The healthy demand continued despite some softening in economic growth, in large part owing to falling fares. Data for the first ten months of the year show a 5% decline in average fares in currency-adjusted terms," Iata said.

November capacity (available seat kilometres or ASKs) increased by 4.2%, and the load factor rose 1.3 percentage points to 78.0%.

Domestic travel demand rose 6.4% in November compared to November 2014, but results were mixed, with Brazil, Russia and Japan all showing declines. Domestic capacity climbed 4.4%, and the load factor improved 1.6 percentage points to 81.1%.   
 
“Consumers continue to benefit from lower fares, which are spurring demand. The economy benefits from the stimulus to consumer spending. And airlines are starting to achieve minimum acceptable profit levels. It’s good news all around, but as we open 2016, economic risks are mounting,” said Tony Tyler, Iata’s director general and CEO.

“The airline industry is delivering solid financial and operational performance. The industry’s return on capital for 2015 and 2016 is expected to exceed its cost of capital—a very rare occurrence. This means we are on the path toward financial sustainability. Consumers are benefitting from lower fares, and airlines are able to invest in new aircraft that are more comfortable, quieter and more environmentally friendly."
 
However, Iata added that the ongoing turmoil in the global financial markets and concerns over slowing economic growth in China are casting a shadow over the New Year.
 
Tyler said 2016 will be a historic year for aviation.

"As states come together at the 39th International Civil Aviation Organisation Assembly to discuss — and I hope agree — on a market-based-measure that will allow airlines to achieve carbon-neutral growth from 2020,” said Tyler.

ZAR/USD
17.04
(-0.38)
ZAR/GBP
21.81
(-0.11)
ZAR/EUR
19.90
(-0.12)
ZAR/AUD
12.03
(-0.12)
ZAR/JPY
0.16
(-1.12)
Gold
1860.65
(+0.03)
Silver
22.87
(+0.11)
Platinum
844.51
(+0.50)
Brent Crude
42.23
(-0.12)
Palladium
2207.00
(+0.59)
All Share
53587.11
(-1.22)
Top 40
49547.74
(-1.16)
Financial 15
9401.28
(-1.95)
Industrial 25
72949.70
(-1.72)
Resource 10
53453.42
(-0.10)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Do you think it was a good idea for the government to approach the IMF for a $4.3 billion loan to fight Covid-19?
Please select an option Oops! Something went wrong, please try again later.
Results
Yes. We need the money.
11% - 1368 votes
It depends on how the funds are used.
73% - 8867 votes
No. We should have gotten the loan elsewhere.
16% - 1959 votes
Vote