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IATA's May Traffic Figures A Mixed Bag

by Ulrika Lomas, Tax-News.com, Brussels

12 July 2011


The International Air Transport Association has announced that international passenger traffic increased by 6.8% year on year in May. Freight however showed a drop of 4% due to the re-stocking cycle that occured in May 2010 but traffic in this area also continues to improve.

“We saw positive developments for the air transport volumes in May. International passenger load factors rebounded by 0.8% to 75.8%. Freight volumes improved by 1.2% over April and passenger volumes were up by 1.8%. These will help to alleviate some of the pressure on profits from continued high fuel prices,” said Giovanni Bisignani, IATA’s Director General and CEO.

“But there are risks associated with political unrest in the Middle East and the European currency crisis. We still expect the industry to make USD4bn this year. That is a pathetic 0.7% margin and another shock could alter the industry’s fortunes dramatically. It’s another tough year for a very fragile industry,” said Bisignani.

IATA's breakdown of international passenger traffic on a regional basis shows:

  • African airlines’ international traffic increased 1.1% over the previous year. Travel markets to the region had been depressed by the impact of political unrest in Egypt and Tunisia. Flights to these two destinations are still about 20% down. However a significant 2.2% improvement in the load factor for the month does show initial signs of improvement.
  • Asia-Pacific carriers recorded an expansion of 4.7%, considerably below the global average of 8.0%. This is due to continuing weakness in the post-earthquake/tsunami Japanese market. Compared to May 2010, capacity expanded 5.0% and the load factor fell slightly to 73.4%.
  • European carriers’ traffic expanded by 10.9%, boosted by increased northern European economic activity and a weaker Euro encouraging trade and inbound travel. Capacity expanded by 10.6%, second only to Latin America, and the load factor strengthened to 77.7%.
  • Latin American carriers saw the fastest international growth, up 21.3% compared to May 2010, and the fastest capacity expansion (15.2%). This is a consequence of strong economic growth and increased travel and trade flows to North America and across the Pacific. The load factor is just above the industry average at 76.0%.
  • Middle East carriers grew international traffic by 7.8% over May 2010, slightly below a 9.6% capacity expansion that saw load factors slip to 70.8%. While political unrest continues to have a dramatic impact on several of the region’s smaller markets, the overall impact on the region’s carriers is very limited.
  • North American carriers have cut capacity for two consecutive months (-0.4% in April and -0.5% in May). Year-on-year, traffic is up 4.5% and capacity increased by 5.5%. This cautious approach to capacity expansion resulted in the highest load factor (81.8%) among the major regions.

Air freight markets showed a 4.0% decline in May. This is skewed as a result of the May 2010 peak, which has been attributed to the post-recession restocking cycle. Since the beginning of the year, freight volumes have increased by a modest 2.0%. This is lower than the 5.5% IATA forecast for 2011. While the continued expansion of world trade at around 6% annually could lend support to accelerated freight growth in the second half of 2011, the performance so far this year has been lower than expected.

Carriers in all regions except Latin America (up 1.5%) and the Middle East (+8.1%) saw air freight declines compared to May 2010. The largest fall was for Asia-Pacific carriers with a 9.2% drop showing the impact of disrupted supply chains in Japan and tighter economic policies in China. Declines by African carriers (down 7.8%) reflected the disruption in Egypt and Tunisia. European and North American carriers had modest falls of 2.2% and 1.4%, respectively.

TAGS: aviation

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