Asia Air Travel Slow In June
August 18 2015 - 11:30AM
Dow Jones News
The surge in air travel in Asia that has powered record demand
for jetliners slowed significantly during the summer, in contrast
to the full planes that are stoking record profits for U.S.
carriers.
Airline traffic within Asia rose just 2.4% in June compared with
a year earlier, sharply down from the 13.8% rise in the previous
month, according to the International Air Transport Association, or
IATA, a global trade group.
"This result could be the first sign of weakness in air travel
demand following months of sluggish economic performance in some
parts of Asia," said IATA in its monthly traffic update.
The trade group said some of the positive trends in passenger
traffic had started to unwind, and though June data is backward
looking, the expansion in business-class travel lagged behind that
in coach. Premium traffic is often used as a proxy for future
economic growth, with an average lag of six months as business
travel translates into deals and other economic activity.
Notably, air travel within the Far East region defined by IATA
fell 2.5% in June from a year earlier, taking growth in the first
half down to 7.8%.
IATA's cautious stance contrasts with the more bullish outlook
for Asia travel from the big aircraft lessors that plan to place
hundreds of additional jets in Asia.
Executives from AerCap Holdings NV and Air Lease Corp. have said
in recent weeks that demand from Chinese airlines remains robust,
and the country's central aircraft ordering agency is expected to
detail its next five-year plan later this year.
Analysts at Cowen & Co. this week noted that Chinese orders
accounted for only 2% of the jet backlog at Boeing Co. compared
with 19% of deliveries over the past two years. Many hundreds of
jets may have been ordered for Chinese carriers, but the customers
have yet to be identified.
IATA also said were signs the recovery in air travel within
Europe was moderating, and with many Latin American countries also
suffering big falls in traffic, U.S. carriers and the big three
Middle East carriers remain the most buoyant sources of growth.
Airlines for America, a trade group, on Monday forecast 14.2
million passengers will fly over the coming Labor Day period, up 3%
from a year ago. The busiest day is expected to be Friday, Sept.
4.
"[We] A4A projected an all-time high for summer travel this year
and year-over-year increases continue," said John Heimlich, the
trade group's chief economist. "With capacity increasing and
airfares trending downward, air travel continues to be more
accessible and a bargain for cost-conscience consumers."
Write to Doug Cameron at doug.cameron@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
August 18, 2015 12:15 ET (16:15 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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