Wings Magazine

IATA reports increase in worldwide passenger demand

Nov. 25, 2010, Geneva, SUI - The International Air Transport Association announced international traffic results for October showing a 10.1 per cent year-on-year increase in passenger demand and a 14.4 per cent year-on-year increase for international freight.

November 25, 2010  By IATA

“As we approach the end of 2010, growth is returning to a more normal pattern. Passenger demand is 5 per cent above pre-crisis levels of early 2008, while freight is 1 per cent above. Where we go from here is dependant on developments in the global economy.  The US is spending more to boost its economy. Asia outside of Japan is barrelling forward with high-speed growth. And Europe is tightening its belt as its currency crisis continues. The picture going forward is anything but clear, but for the time being, the recovery seems to be strengthening,” said Giovanni Bisignani, IATA’s Director General and CEO.

Freight appears to be at a turning point. Since May, freight volumes have declined by 5 per cent. October saw an end to the decline in freight with a slight uptick. “But a single month does not make a trend. And it remains to be seen if this is the stabilization in freight volumes or the start of an upward trend,” said Bisignani.

Improvements in demand are being met by a cautious approach to capacity expansion. Over the first 10 months of the year, passenger demand grew by 8.5 per cent, with a capacity expansion of 4.0 per cent. A cargo capacity expansion of 9.2 per cent was well below the demand increase of 24 per cent. Forward schedules indicate a continuation of this trend, with a 7.5 per cent passenger capacity increase planned for the half-year scheduling period beginning at the end of October.

International Passenger Demand


The 10.1 per cent growth in passenger demand in October is slightly below the 10.7 per cent recorded in September, but both months are an improvement over August.
North American airlines posted a 12.4 per cent demand increase over October 2009. October represented the fastest growth rate for the year. With a capacity increase of 11.9 per cent, the load factor for North American airlines was pushed to 82.5 per cent, the highest among all regions. Compared to pre-recession levels of early 2008, the region’s airlines are carrying 2 per cent more traffic.
European carriers showed a 9.6 per cent increase over October 2009. This is significantly better than the 8.6 per cent growth reported for September.  European airline traffic grew by 1.5 per cent from September to October and is now 4 per cent higher than the pre-recession levels of early 2008.
Asia-Pacific carriers posted a 7.3 per cent demand increase, ahead of a 5.3 per cent increase in capacity. Volumes remain 1 per cent below pre-crisis levels of early 2008.
African airlines recorded strong growth (13.3 per cent) compared to October 2009. With a capacity increase of 8.9 per cent, load factors improved to 71.8 per cent.
Latin American airlines posted a comparatively weaker performance with a 4.9 per cent increase in demand and a 0.7 per cent drop in capacity. The region’s results remain skewed because of the bankruptcy of Mexicana.
Middle East carriers recorded the strongest growth for the month with an 18.0 per cent increase in demand. This is despite the earlier Ramadan dates, which negatively skewed the numbers with a 1 per cent fall in October traffic as compared to September. The region also had the largest capacity expansion at 13.7 per cent compared to October 2009.
International Cargo Demand

The 14.4 per cent year-on-year increase in freight traffic for October was marginally weaker than the 15.5 per cent recorded in September. Nonetheless, international freight volumes actually improved slightly from its September level on a seasonally adjusted basis.
Asia-Pacific airlines reported a 14.9 per cent year-on-year increase in international freight demand, down from the 16.2 per cent recorded in September. October’s growth translates to an impressive 22 per cent annualized growth rate for the region’s carriers, reflecting the strong economic recovery particularly in China and India. With a 44 per cent share of total freight traffic, the growth experienced by Asia-Pacific airlines played a large role in the uptick seen in overall industry freight volumes during October.
European airlines recorded a 12.1 per cent year-on-year demand increase in October. North American carriers saw a slightly larger improvement of 12.2 per cent. For both regions, October freight volumes represented a 6 per cent improvement on freight volumes carried in December 2009. Relative weakness in the Euro and dollar is helping export activity and boosting freight traffic.  Even so, traffic remains 12 per cent below pre-recession levels of early 2008 for European airlines and just 2 per cent higher in North America.
“We are ending 2010 in much better shape than we were just 12 months ago. Airlines have turned losses into profit—albeit tiny. Despite the economic uncertainties people continue to fly. Airlines appear to be managing capacity in the upturn with a good deal of prudence. And cost control continues to be a main theme for airlines everywhere,” said Bisignani.

“A good example of airlines delivering change is the conversion to bar coded boarding passes (BCBP). In 37 days we will achieve 100 per cent capability for BCBP. The courage to change brings great benefits: $1.5 billion in cost savings for the industry and greater convenience for our passengers,” said Bisignani.

“Not all in the supply chain have the same courage to change. We have been waiting decades for the efficiency of a Single European Sky. Average air traffic management costs per flight in Europe are EUR 771, compared to EUR 440 in the US. This is a EUR 5.0 billion competitive disadvantage for Europe that affects everybody that flies or ships goods by air. Reluctance to change continues to put the program at risk. It is extremely disappointing to see some European state governments refusing to implement the 4.5 per cent cost reduction target for 2012-14 agreed by the independent Performance Review Board,” said Bisignani.

“This is no hardship. With inflation expected to be 1.6-2.0 per cent and with traffic growth of 3.2 per cent, this is achievable simply by containing costs. If Europe’s air traffic management community cannot see the need for change, I hope that Europe’s Transport Ministers will. I urge them to support the European Commission in building a more competitive Europe, driven by serious performance targets and with a modern cost-efficient approach to air traffic management that is the Single European Sky,” said Bisignani.


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