Key growth trends in airline passenger traffic by region

Global passenger traffic

Global passenger traffic has increased by 5.8% year-over-year during the first eight months of 2014. Europe (29.7%), Asia-Pacific (29.2%), and North America (25%) comprise ~85% of global market share by passenger traffic.

In this article, we’ll discuss the growth trend in passenger traffic by region, as reported by the International Air Transport Association (IATA).

Europe

Despite the weakening of key economies due to the Russia-Ukraine crisis, there was a 6.8% year-over-year increase in international traffic in Europe in August. The crisis has, however, resulted in lower consumer confidence. This might have an adverse impact on demand for air travel in the near future. Domestic traffic in Russia increased by 10.1% in August—the highest growth among other countries, including China, India, Japan, the U.S., Brazil, and Australia.

Asia-Pacific

In August, international traffic growth improved in the Asia-Pacific region (5.8%) after the Chinese market stabilized, supported by government fiscal stimulus and regional trade activity. The Chinese economy is expected to grow 7.5% in 2014, driven by the growth in service sector despite the decline in industrial production in 3Q14. Domestic traffic also has increased in China, India, and Japan by 6.4%, 7.4%, and 1.5%, respectively.

North America

In the North American market, positive trends in economic activity resulted in 3.2% growth in international traffic. Domestic traffic in the U.S. increased by 2.7% in August. Major U.S. carriers serving the domestic market include Delta (DAL), United (UAL), American (AAL), Alaska (ALK), Southwest (LUV), and JetBlue (JBLU). These airlines are also part of ETFs such as the Shares Transportation Average ETF (IYT) and the SPDR S&P Transportation ETF (XTN).

Middle East and Africa

The largest year-over-year growth in international traffic was recorded in the Middle East (11.7%). This growth was supported by strong regional economies, improving business confidence, and expanding exports. The growth in African international traffic has been volatile. There was weakness in international air travel due to a slowdown in the South African economy.

Latin America

International traffic in Latin America increased by 8.2% year-over-year, driven by economic growth in Colombia, Peru, and Chile. In Brazil, however, weakness in the economy has slowed down growth in travel. Despite the weak economy, domestic traffic in Brazil increased by 6.7% year-over-year in August.