Demand for air travel declined in March, particularly in Africa, as a result of the economic slowdown in South Africa.
This is according to Iata’s passenger traffic results for March, which – globally – showed a moderation of the pace of growth in demand. “After a number of very strong months we are seeing a slowing of demand growth. The strong performance of advanced economies, nevertheless, is likely to support the continued growth of traffic in the coming months,” said Tony Tyler, Iata dg and ceo.
African airlines saw demand fall 2,6% from a year ago. According to Iata’s economics unit in Geneva, key South African factors dragging down the performance in Africa included the prolonged mine-workers strike in the platinum sector, the easing off of foreign investment pending clarity on the country’s economic policies, rising unemployment, rising costs (especially fuel and wages), the relative weakness of the rand and rising inflation.
“Economic growth in South Africa weakened in 2013 compared to 2012, and the sluggishness has continued into 2014 so far. Unemployment rates remain high, which has dampened aggregate demand. Continued weakness of the rand has limited spending. There was also an interest rate increase in January, which would restrict credit demand. These developments place downward pressure on consumer confidence and incomes, which are drivers for air travel demand.”
The slowdown is most pronounced for premium (first and business) international RPKs from South Africa: 5,5% in 2012 down to 3,1% in 2013. Furthermore, there has been no growth in premium travel for January and February 2014 combined compared with January and February 2013. There could be some switching of premium class passengers away from first/business to economy (as a means of cost saving).
Overall, airlines in Africa have seen virtually no growth – only 0,2% – during the first quarter of 2014 compared with the same period in 2013.
