Domestic air travel contracts 2.2%

Rising operational costs, insufficient infra, high taxes, onerous regulation affected it

The demand for domestic air travel in India contracted 2.1% in 2012 from the 2011 level, according to a report by the International Air Transport Association (IATA).

Weak economic growth coupled with increasing operational costs, insufficient infrastructure, high taxes and onerous regulation affected the domestic air travel in India in 2012.

However, globally the domestic air travel grew by 4% 2012 led by strong growth in China (9.5%) and Brazil (8.6%).

The capacity growth in China at 11.3% outstripped the demand. However, the 4.8% capacity growth in Brazil was around half its increase in air traffic.

During the year, the US domestic air traffic expanded by 80 basis points supported an 83.4% load factor, the strongest among the major markets. The slowdown reflects the maturity and subdued economic growth of the US market which accounts for about half of all domestic travel, the IATA report said.

Japan’s domestic air travel saw a demand growth of 3.6% in 2012 while the capacity expanded by 2.3%. However, Japanese domestic demand continues to suffer from a weak economy and it remains 7% smaller than pre-tsunami levels with the weakest load factor (62.0%) among the major domestic markets.

According to the IATA report, international passenger demand globally grew by 6% in 2012 with strongest growth coming from emerging markets, particularly the Middle East (15.4%), Latin America (8.4%) and Africa (7.5%).

Asia-Pacific carriers saw international passenger growth of 5.2% in 2012 which was stronger than the 4% growth reported in 2011.

The overall air travel demand globally in 2012 show 5.3% year-on-year increase with a load factor of 79.1%.

“Passenger demand grew strongly in 2012 despite the economic bad news that dominated much of the last twelve months. This demonstrates how integral global air travel is for today’s connected world,” said Tony Tyler, IATA’s Director General and CEO, in a statement.