International scheduled traffic results of
IATA members in August 2010 indicate year-on-year increases of a
6.4% for passenger and 19.6% for cargo.
August demand is down from the 9.5% (revised)
increase recorded for passenger and 23% growth in cargo recorded
The August 2010 data is partially distorted by
the comparison to
August 2009, by which time markets were already
expanding rapidly in a post-recession rebound. When adjusted for
seasonality, traffic volumes for passenger traffic fell by 1% and
cargo by 0.8% compared to July.
“The rapid improvements in demand that we saw
earlier this year are behind us. The slow down of demand in August
is consistent with our forecast for a tougher end to 2010 as
government stimulus monies run out without having generated
significant improvements in employment. The bounce from
re-stocking is over. We do not yet see the strong consumer
confidence needed to sustain the expansion with spending,” said
Giovanni Bisignani, IATA’s Director General and CEO.
Capacity increases in passenger markets are accelerating. Since
December 2009, air travel volumes have expanded by 4.3% while
capacity has risen by 6%. Passenger load factors remain high
(81.6%), but when adjusted for seasonal fluctuation this amounts
to a drop of 1.5 percentage points compared to the February 2010
Freight capacity is matching demand trends which are
stabilizing. Since December 2009, the freight volume expansion of
9.2% has been matched by capacity expansion. After a rapid
improvement throughout 2009, freight load factors have leveled off
Global passenger traffic
in August was 2% above pre-recession levels of early 2008.
Asia Pacific carriers recorded a demand increase of 6.2%. While
this is still a comparatively strong performance, the region’s
airlines carried a similar seasonally adjusted volume of traffic
in August as they did in January indicating a leveling off of the
strong gains recorded throughout 2009.
recorded a 5% growth in demand for August when compared to the
previous year. Most of the growth that is supporting August’s 5%
year-on-year expansion has come during 2010. Demand improvements
are being supported by inbound traffic on the back of the weak
Euro. Business travel has also been given a boost by a revival in
North American carriers recorded a 5.3% improvement
compared to the previous August. This is a similar pattern to
Europe’s carriers with most of the demand improvement having
materialized during 2010 and coinciding with a weakening of the US
dollar enticing inbound leisure travel and stronger business
travel in both directions.
Latin American carriers saw the
largest dip in demand growth - from 15% in July to 8.7% in August.
The bankruptcy of Mexicana airlines affected about 1 million
passengers and slightly distorted these numbers. None-the-less,
passenger demand in Latin America has leveled-off in 2010 after
robust growth in 2009.
Middle East carriers recorded demand
that was 12.3% ahead of August 2009 levels. This is down from the
16.5% recorded for July. The shifting of Ramadan into August is
partially responsible for the slowdown. It was the only region in
which capacity expansion of 13% outstripped demand.
carriers recorded growth of 10.8% slightly ahead of a capacity
expansion of 9%. Economies in this region are still delivering robust growth. This is helping to generate further growth in
business travel in the region, which is supporting the growth of
African airlines passenger business.
international cargo traffic in August was 3% above the
pre-recession levels of early 2008.
During the first quarter,
air freight grew at an annualized rate of 25%. The first two
months of the third quarter recorded annualized growth of 12%.
With the restocking phase of the inventory cycle now complete
growth rates are shifting back towards trend growth in world trade
of around 6%. Freight markets are still growing but at a
significantly slower pace.
The patterns of recovery are
shifting. Freight volumes carried by Asian carriers have increased
by 3.8% since January while European and North American carriers
have seen a 6-8% expansion over the same period. Several drivers
are contributing to this shift. Weaker currencies in the US and
Europe are supporting export growth and improving the
competitiveness of US and European carriers.
may be the fall in import activity in Europe and the US dampening
the demand for finished goods manufactured in Asia. Asian carriers
are the largest participants in global cargo markets with a market
share of 44%. Consequently they are disproportionately affected by
any trend - upwards or downward.
Slower growth is consistent with
IATA’s recently revised global industry outlook. The industry is
expected to post a profit of $8.9 billion (up from the June
forecast of $2.5 billion) based on an exceptionally strong first
half of the year. The slower demand growth in the second half is
expected to continue into 2011. But with capacity increasing
faster than demand, yields are not expected to grow. With a much
tougher revenue environment, expectations are for a significantly
reduced profit of $5.3 billion in 2011.
“On $560 billion in
industry revenue, our margins are just 1.6%. Having a bigger black
number on the bottom line is good. But we must also be realistic
in understanding that the profitability is fragile. And the August
results are a reminder that as we move into 2011, we are expecting
a more challenging revenue environment,” said Bisignani.
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