News
IATA reports air traffic dipped in November

November saw traffic growth slow from the 10 per cent increase recorded in the passenger business and the 14.5 per cent growth in freight in October. The slowdown in 2010 is partially skewed because of the exceptionally rapid rise in traffic volumes recorded during the fourth quarter of 2009. However, when viewed in absolute terms, air travel fell by 0.8 per cent and air freight fell by 1.1 per cent between October and November 2010.

This slower growth does not necessarily signal a negative trend. Even with the decline in November, passenger and freight traffic are still expanding at annualized rates of between 5-6 per cent which is in line with the industry’s historical growth trend.

“The industry is shifting gears in the recovery cycle. Growth is slowing towards normal historical levels in the 5-6 per cent range. Relative weakness in developed markets is being offset by the momentum of economic expansion in developing markets. We see a strong end to 2010 that boosted the year’s profit forecast to $15.1 billion. Slowing traffic growth is in line with our projections for a reduced profit of $9.1 billion in 2011. That’s a 1.5 per cent margin. More hard work will be needed in the New Year to achieve sustainable levels of profitability,” said Giovanni Bisignani, IATA’s Director General and CEO.

International Passenger Demand

The level of international air travel is now 4 per cent above the pre-recession peak of early 2008. All regions, except Africa, reported a slowing in year-on-year growth rates from October to November.

Europe’s carriers recorded 7.3 per cent growth in passenger traffic, below the 9.4 per cent recorded in October. Overall travel performed by the region’s carriers is only slightly ahead of the pre-recession levels of early 2008. In absolute terms there was a 1.7 per cent fall in traffic volumes for the region’s carriers between October and November. Industrial labor action and adverse weather conditions particularly affected Europe’s carriers at the very end of the month. The impact of these will continue to be seen in December’s traffic.
North American carriers saw their growth slow from 12.4 per cent in October to 9.5 per cent in November.  Capacity growth in November was 9.5 per cent, resulting in a load factor of 78.1 per cent, the highest among the regions. November passenger traffic levels for North American carriers equaled the pre-recession levels of early 2008.

Asia-Pacific carriers saw their growth slow from 7.3 per cent in October to 5.8 per cent in November. Capacity expanded relatively in tandem (5.9 per cent) for a load factor of 75.6 per cent. Despite the region’s strong economic growth and financial performance, November traffic levels were still 2 per cent below pre-recession levels.
Latin American carriers showed the most dramatic decline in growth rates—from 4.9 per cent in October to virtually zero in November. The lingering impact of the Mexicana failure is the largest contributing factor in this decline which resulted in a 2.1 per cent absolute contraction of travel performed by the region’s carriers between October and November. Adjusting figures to eliminate the impact of Mexicana, the region would be experiencing growth in the low double digits. The region’s load factor stands at 77.5 per cent.

Middle East carriers saw their growth rate decline from 17.8 per cent in October to 16.7 per cent in November.  The region’s carriers handled 16 per cent more traffic in November than at the pre-recession peak in early 2008, showing that they have gained market share over the course of the recession and the recovery. The region recorded a load factor of 74.3 per cent, below the global average of 75.6 per cent.

African carriers were the only region to show an increase in growth rates from October (12.6 per cent) to November (16.4 per cent). The region’s carriers moved 11 per cent more travelers in November than they did at the pre-recession peak in early 2008.

Freight Demand
The air freight recovery hit a peak in May 2010. Compared to that peak, volumes have fallen 7 per cent. The volume of air freight in November was equal to pre-recession levels of early 2008.
November’s year-on-year growth of 5.4 per cent is a significant shift from the 14.5 per cent recorded in October. This was exaggerated by the exceptionally strong performance in November 2009. In absolute terms, there was a 1.1 per cent fall in freight volumes from October to November. All regions, except Africa, showed dramatic drops in year-on-year growth rates from October to November.

November freight carried by Asia-Pacific carriers showed a 4.1 per cent year-on-year increase. The region’s carriers moved a similar amount of freight in November that they did at the pre-recession peak of 2008.
Middle Eastern carriers saw 12.4 per cent year-on-year growth for November. The region’s carriers handled 14 per cent more freight in November than they did at the pre-recession peak in early 2008.

North American carriers showed 1.5 per cent year-on-year growth in November, but overall volumes remain 7 per cent below the pre-recession levels of early 2008. European carriers experienced a similar pattern with 6.6 per cent year-on-year growth in November but overall volumes remaining 12 per cent below pre-recession levels.
“The year-end holiday season has been tough for travelers and for airlines. Exceptionally adverse weather conditions in Europe and the US resulted in travel chaos. Passengers were inconvenienced. Airlines saw lost revenues and saw costs rise. As the backlogs of stranded passengers clear and the situation normalizes, there are two opportunities that must not be lost. The first is to learn and apply lessons from this difficult season so that all stakeholders in the industry’s infrastructure are better prepared for future exceptional situations,” said Bisignani.

“The second opportunity is to evaluate the regulatory world in which aviation operates. In 2010, the Icelandic volcano and the year-end adverse weather made the value of air transport crystal clear. Modern life and the global economy depend on aviation. Whether you are a business person operating in the global market, families keeping in touch across distances or heads-of-state on important foreign missions, aviation is critical. While memories of the travel chaos are still fresh, it’s time to evaluate a long list of government imposed industry handicaps, including excessive taxation, out-dated ownership restrictions, over-regulation where market forces could do better, under-investment in infrastructure and generally poor regulation of monopoly suppliers. We must not let governments forget all of this while waiting for a change of seasons,” said Bisignani.

“For our part, IATA is launching Vision 2050—a dialogue on the industry’s future among strategic thinkers from government, industry and academia. We will meet in Singapore this February with an important mission to build a vision for a successful and sustainable industry in four decades. The group will be guided by the inspirational support of Singapore’s Minister Mentor Lee Kuan Yew and the expertise on competitiveness of Harvard University’s Professor Michael Porter. Our common goal is to fortify the foundations of the industry to support its ever-growing role in supporting modern life in our global world,” said Bisignani.