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Air Demand Continues Recovery in June

July 28, 2010 By: George Dooley

International scheduled airline traffic for June showed continued strong demand growth as the industry recovers from the impact of the global financial crisis, the International Air Transport Association (IATA) reports. Compared to June 2009, international passenger demand was up 11.9 percent while international scheduled freight traffic showed a 26.5 percent improvement.

“The industry continues to recover faster than expected, but with sharp regional differences. Europe is recovering at half the speed of Asia with passenger growth of 7.8 percent compared to the 15.5 percent growth in Asia-Pacific,” said Giovanni Bisignani, IATA’s director general and CEO.

Outside of Europe, all regions reported double-digit growth in passenger traffic. “The question is how long can the industry maintain the double-digit momentum. Business confidence remains high and there is no indication that the recovery will stall any time soon. But, with government stimulus packages tailing off and restocking largely completed, we do expect some slowing over the months ahead,” said Bisignani.

Capacity increased only slightly above demand improvements during the month, IATA reports, keeping load factors in line with historical highs at 79.8 percent for passenger traffic and 53.8 percent for freight.

After a dip in April due to the volcanic ash crisis centered in Europe, international passenger demand has returned to its upward growth trend, IATA says. Passenger volumes are now 1-2 percent above the pre-recession peak in the first quarter of 2008.

North American carriers posted growth of 10.8 percent, comparable to the 10.9 percent recorded for May 2010. Strong growth and the industry-leading load factor of 86.6 percent are contributing to strong second quarter financial results being announced by the region’s carriers, IATA reports.

Middle Eastern carriers continue to post the fastest growth—up 18.0 percent compared to June 2009. This is based on a strong regional economy and the ability to attract long-haul traffic through the region’s hubs.

Asia-Pacific carriers recorded the most significant demand improvement at 15.5 percent. China continues to be the region’s growth engine. European carriers reported 7.8 percent growth, down slightly from the 8.3 percent recorded in May. While annualized growth of 6.2 percent is in line with the industry average, it is clear that the recovery in Europe is lagging behind the rest of the world, IATA said.

Latin American carriers showed a 14.7 percent increase in passenger traffic compared to June 2009. This reflects a more normal growth rate than the 23.6 percent recorded in May when results were heavily skewed by the Influenza A (H1N1) crisis which centered on the region in May last year. African carriers posted a 21.3 percent increase in traffic in June, positively impacted by activities surrounding the FIFA World Cup, IATA says.

“We remain cautiously optimistic. A clear indication of the growing confidence is the over 400 aircraft orders announced at the Farnborough Air Show. This is good news that will bring environmental benefits through improved fuel efficiency. But it will also make the challenge of matching capacity to demand much more difficult,” said Bisignani.



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