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Air travel up 5.9pc in July; freight stagnates

Geneva, September 1, 2011

Global air passenger travel in July was up 5.9 per cent over July 2010, while freight markets were stagnating with a 0.4 per cent demand decline over previous year levels, said a report from the International Air Transport Association (Iata).

“Passenger travel bucked the gloomy economic outlook with a 5.9 per cent increase in July. This increase was likely based on the much more optimistic economic outlook that marked the beginning of the year,” said Tony Tyler, Iata’s director general and CEO.

“With business and consumer confidence now tanking, sluggishness in international trade, and high fuel prices, the expectation is for a weaker end to the year. We are already seeing this in the shrinking air freight markets, which were 0.4 per cent down on the previous year.”

International passenger markets, which grew by 7.3 per cent compared with July 2010, remain stronger on average than domestic markets which showed weaker growth of 3.5 per cent year over year, Tyler added.

Compared to pre-recession levels of early 2008, international passenger traffic has expanded by 12 per cent.

Had the industry continued to grow at the pre-recession pace of 8 per cent, international markets would have been about 14 per cent higher than today’s levels and a quarter higher than pre-recession level. This confirms that the global financial crisis has cost airlines about two full years of growth, the report said.

Demand for international air travel in July was 7.3 per cent above the previous year’s level and considerably stronger than the 6.0 per cent growth recorded in June. This boosted the international load factor to an impressive 83.1 per cent.

The increase goes beyond the seasonal fluctuation which normally produces a July spike owing to the Northern hemisphere vacation season.

Middle East carriers posted a 9.7 per cent increase in demand, outstripping the 8.9 per cent capacity increase. Load factors for the month stood at 81.4 per cent.

African carriers posted a 6.6 per cent increase in demand against a 4.9 per cent increase in capacity.  The region’s load factor stood at 73.1 per cent.

European carriers roughly matched the 9.3 per cent increase in demand with an 8.9 per cent increase in capacity, while the Latin American carriers were the strongest performers with a 10.3 per cent increase over the previous July, supported by strong regional economies and liberalized markets.

North American carriers saw a 3.9 per cent increase in demand exceeded by a 4.4 per cent increase in capacity.

Asia-Pacific carriers had a capacity increase of 5.8 per cent run ahead of demand growth of 4.9 per cent.

Domestic markets

US domestic markets, which represent 50 per cent of the world’s market, grew 2.1 per cent compared to July 2010.

China, with the second biggest domestic market (18 per cent of the world), slowed abruptly to just a 5.1 per cent increase in July.

The Japanese market is recovering slowly from the shock of the March earthquake and tsunami. While June showed a 20.3 per cent decline on previous year’s levels, July was 16.7 per cent down.

Brazil and India recorded the highest growth rates of 17.8 per cent and 20.6 per cent respectively. Both were stronger than June’s performance.

Freight (domestic + international)

Middle East and Latin American carriers showed the strongest performance with gains of 8.4 per cent and 8.2 per cent respectively.

Asia-Pacific carriers continue to show the weakest freight performance with a 3.6 per cent decline compared to July 2010.

Freight load factors have declined significantly (1.8 percentage points) to the pre-recession level of 45.0 per cent. Asia-Pacific carriers, the largest in the market, have seen load factors slip to 58.1 per cent (from 60.2 per cent in July 2010).

“July is the peak in the annual cycle for passenger traffic. This year was no exception. But even if the industry’s performance could be classified as stronger than expected, we do face headwinds as we look towards the end of the year,” Tyler said.

“Some of our challenges have a high percentage of government-made content. The recent downsizing of Air Berlin is a clear reminder of the high cost of the German departure tax on the economy, jobs and communities.”

“Governments should not compromise aviation’s role as an economic catalyst for the short-term revenue gain of gratuitous taxation—particularly when economies remain weak,” he concluded. – TradeArabia News Service




Tags: Iata | freight | Geneva | Air passengers | July |

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