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IATA's
international traffic data for May 2008 shows a significant drop in cargo growth to 1.3% while passenger traffic grew by
6%.
At 1.3%, cargo demand is considerably down from the 4.3% recorded for the full year 2007. For the first five months of 2008, air freight volumes
were up 2.8%. The biggest cause of the slow growth came from a 0.5% contraction in Asian carrier traffic. This resulted from the impact of the
earthquake in China and weakness in the Japanese economy. Asian carriers also saw weakness in transpacific markets with increased
competition from US carriers taking advantage of the weak US dollar.
International passenger demand grew 6% in May. This is slower than the 7.4% increase recorded for the full year 2007, but stronger than
expected given the economic downturn. The results were skewed by a shift in the US of 1.7 billion available seat miles (2.72 billion available seat
kilometers) from domestic routes to international routes (a 7.9% rise in capacity in international markets). North American carrier international
traffic grew 8.2%, while domestic capacity fell 3.3%. Overall the underlying growth rate in global domestic and international traffic was 3 to 4%
(down from an average of 6% for 2007).
International load factors rose slightly for the first time in three months to 74.3% on slower capacity growth of 5.4% during the month.
“The high price of oil is re-shaping the industry. The major shifts in traffic flows experienced during May reflect this,” said Giovanni
Bisignani, IATA’s Director General and CEO.
During May jet fuel averaged US$160 per
barrel, 87% higher than the same time in 2007. By comparison, crude prices averaged US$123 per
barrel, an 81% increase. “Jet fuel margins are increasing the impact of skyrocketing oil prices for the aviation industry. Unit costs are up 20-30%
and that is going to take its toll on the bottom line. Efficiency everywhere is the imperative. That must be understood by governments, labour and
our industry partners,” said Bisignani.
Cargo
North American cargo traffic grew 4.6% as US carriers shifted capacity from domestic to international routes. In addition to expanded
transpacific opportunities, the US-EU Open Skies agreement created new opportunities in Europe.
Europe recorded a sluggish 1.4% increase. The strong Euro is damaging competitiveness for both European exports and the European air cargo business.
Latin America freight volumes contracted 13.2%. Industry restructuring saw the replacement of retiring wide-body aircraft with narrow-bodies
with limited cargo capacity.
Africa recorded its 11th month of air freight contraction out of the past 12 months with a fall of 6.5% during May as industry restructuring
removes freight capacity.
The lone bright spot was the Middle East where volumes rose 10.7% on the back of oil-based economic growth.
Passenger
Airlines in Latin America continued strong growth of 13.6% reflecting robust commodity-driven economic growth in the region.
Middle Eastern airlines expanded their traffic 12.8%, lower than the 18.1% increase achieved for the full year 2007 due to slower economic
growth in origin-destination regions using Middle East airports as connecting points.
The further decline in traffic carried (-2.2%) and capacity provided (-5.1%) by African airlines reflects a loss of market share and the reduction of
unprofitable capacity in the face of high and rising fuel prices.
Reversing the trend of the previous three months, load factors rose slightly in May to 74.3% as high fuel prices are forcing cuts in capacity and
the retirement of older aircraft.
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