IATA’s global airline traffic results for
November 2011 show a softening in passenger markets while air
cargo markets remain weak compared to levels attained earlier in
Passenger traffic was 4.3% above November
2010 levels but this is skewed as November 2010 was a particularly
weak month. The softening in passenger markets becomes apparent
when comparing to the previous month (October 2011). This shows a
0.5% decline on a seasonally-adjusted basis.
Freight markets were 3.1% below November 2010
levels despite a 1.1% increase on October 2011 performance.
“Weak global economic performance is being reflected in air
transport markets. Freight markets have contracted some 4%
compared to January. Although passenger markets have had some
growth relative to the beginning of the year – about 2% – the
trend has been both soft and volatile. Continuing economic
uncertainty will likely mean market shortcomings deepening as we
enter 2012,” said Tony Tyler, IATA’s Director General and CEO.
Globally, passenger load factors have fallen sharply to 76.3%
from 78.5% in October. This shows that the weakness in passenger demand is outpacing airlines’ ability to adjust capacity
accordingly. Regional differences are sharp. While North American
carriers saw a 0.8% decline in travel, carriers in the Middle East
experienced a 10.1% increase, followed by 9.0% for Latin American
International Passenger Markets
International travel markets continue to be weaker than domestic
markets. Compared to October, international demand contracted by 1.5% while domestic demand grew by 1.3%.
North American airlines saw international
demand shrink by 1.2% (compared to November 2010), roughly in line
with a 1.0% reduction in capacity. The fourth quarter uptick in
the US economy has yet to be reflected in passenger markets.
Latin American and the Middle Eastern carriers recorded the
strongest year-on-year growth at 8.8% and 9.8% respectively. For
both regions, capacity increases outstripped the growth in demand
with Middle Eastern carriers growing their capacity by 10.4% and
Latin American carriers by 11.4%. Latin American economies have
remained strong with robust trade activity. Middle Eastern
airlines have seen a gain in market share on long-haul markets
through price competitive products.
continued to face the weakest market outlook due to the
uncertainty in the Euro-zone. Demand grew 4.9% compared to the
previous November while capacity increased by 5.3%. This is a
steep change from the 6.4% demand growth recorded for October on a
capacity increase of 8.1%. Growth in travel has been supported by
business travel on the back of export strength in economies such
Asia Pacific airlines reported 2.4% growth in
year-on-year demand which is less than half the 5.4% growth in
capacity. The region’s carriers recorded a load factor of 73.3%.
African carriers reported 2.6% growth in demand. While this is
twice the 1.3% capacity expansion, the region still recorded the weakest load factors of 66.2%.
Domestic Passenger Markets
Overall domestic performance was better than that of
international markets with 4.7% year-on-year growth in November
and an average load factor of 79.2%. Sharp differences remained
between the major markets:
US domestic demand fell by 0.8%
(year-on-year). Capacity cuts of 3.4% resulted in the strongest
load factor of 83.4%.
Chinese domestic demand showed the
strongest year-on-year growth at 17.2%. This is in excess of the
13.3% growth in capacity and resulted in a load factor of 80.7%.
Demand in the Indian domestic market grew by 10.7%, which is well
below the 17.3% expansion in capacity. Load factors stood at 76.8%.
Brazil recorded 9.4% year-on-year growth in demand which
was relatively in line with the 10.3% increase in capacity. Load
factors stood at 65.7% for the month.
The post-earthquake and
tsunami recovery in the Japanese market stagnated in November.
Demand was 10.7% below levels attained in the previous year.
Despite capacity cuts of 9%, Japan still recorded the weakest
domestic load factor at 65.4%.
Air Freight (Domestic and
Air freight markets continued their decline
in line with weak economic performance and falling business
confidence. International markets declined by 3.8%. This was
offset by 2.0% growth in domestic markets. Nonetheless, system
wide demand shrank by 3.1% in comparison with November 2010.
International freight load factors have declined 6 percentage
points from their peak in mid-2010. While freighter capacity has
been adjusted to meet demand, belly cargo capacity follows the
trend in passenger demand.
Asia Pacific carriers have seen the
weakest demand performance driven by falling demand for Asian
manufactured goods from US and European consumers. The region’s
carriers saw the market decline by 6.4%.
reported a 4.6% fall in demand reflecting continued uncertainty
associated with the Euro-zone crisis.
North American carriers’
operations were largely unchanged from the previous year with only
The Middle East and Latin American carriers
delivered the strongest cargo performance with 4.6% and 4.0%
African carriers reported a 1.7%
holiday season reminds us all of the importance of connectivity
and how aviation is a force for good in the world. Global supply
chains bring holiday goods to markets. Millions of people are
reunited with family and friends. Millions more embark on journeys
of discovery or rest and relaxation. Early in the New Year they
will be joined by business travelers seeking to grow their businesses by exploring new markets opportunities,” said Tyler.
“This year the story of aviation’s importance is even more
compelling as governments around the world seek solutions to
economic uncertainty. Economic growth is the only durable
solution. Aviation can be a catalyst for that growth. But that
depends on governments allowing airlines to get on with the
business of providing global connectivity. The New Year’s
resolution for every government with respect to aviation should be
to stop over-taxation or mis-regulation of this vital economic
driver,” Tyler added.
IATA is estimating the airline
industry will make a collective profit of $6.9 billion in 2011 for
a net margin of 1.2%. IATA forecasts that this will fall to $3.5
billion in 2012 (0.6% net margin). But the association has warned
that the downside risk of the Euro-zone crisis failing to be
resolved could lead to losses in excess of $8 billion.
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