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Global Airline Traffic Gained in 2012 on Emerging Markets

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Jan. 31 (Bloomberg) -- Global air passenger traffic grew 5.3 percent last year, boosted by the expansion of Middle Eastern carriers and demand from markets in Latin America and Africa, the International Air Transport Association said today.

While growth slowed from 2011’s 5.9 percent figure, it was above the 5 percent 20-year average, the trade body said in a statement. Capacity restraint helped lift seat occupancy to near-record levels, giving a profit margin of about 1 percent.

“We are entering 2013 with some guarded optimism,” IATA Chief Executive Officer Tony Tyler said. “Business confidence is up. The euro-zone situation is more stable than it was a year-ago and the U.S. avoided the fiscal cliff.”

Passenger traffic should grow by 4.5 percent in 2013, with cargo markets clawing back their 1.5 percent contraction last year, IATA said. That may lift net income from an estimated $6.7 billion in 2012 to $8.4 billion, giving a 1.3 percent margin.

Demand in international markets expanded 6 percent last year and domestic travel grew 4 percent, according to IATA. Negative factors still weighing earnings include high fuel costs and sluggish economic growth projected at 2.3 percent, it said.

Cargo Slump

With overall capacity increasing by 3.9 percent in 2012, passenger load factors improved to an average of 79.1 percent. That compared with 45.2 percent in the freight market, which suffered a second straight annual drop after a “one-two punch” of declining trade and a shift to sea shipping, IATA said.

The number of people flying cross-border with Mid-East carriers such as Dubai-based Emirates and Qatar Airways gained 15.4 percent last year, accounting for almost one-third of the expansion in international markets, the industry group said.

Domestic traffic grew the most in China and Brazil, up 9.5 percent and 8.6 percent respectively. The figure for the U.S. was 0.8 percent, though that was twice the pace of capacity growth and produced an 83.4 percent load factor -- the highest among major markets.

To contact the reporter on this story: Kari Lundgren in London at klundgren2@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net