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IATA Reports Strong End to 2010

December 30, 2010 By: George Dooley

International scheduled traffic results for November showed an 8.2 percent year-on-year passenger traffic growth and a 5.4 percent increase for freight. The passenger load factor for November averaged 75.6 percent while the freight load factor stood at 55.2 for the month, the International Air Transport Association (IATA) reported.

November saw traffic growth slow from the 10 percent increase recorded in the passenger business and the 14.5 percent 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, IATA said. However, when viewed in absolute terms, air travel fell by 0.8 percent and air freight fell by 1.1 percent between October and November 2010.

“The industry is shifting gears in the recovery cycle. Growth is slowing towards normal historical levels in the 5-6 percent range," said Giovanni Bisignani, IATA’s director general and CEO. "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 percent margin. More hard work will be needed in the New Year to achieve sustainable levels of profitability."

International Demand

• The level of international air travel is now 4 percent 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 percent growth in passenger traffic, below the 9.4 percent 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 percent 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 percent in October to 9.5 percent in November. Capacity growth in November was 9.5 percent, resulting in a load factor of 78.1 percent, the highest among the regions. November passenger traffic levels for North American carriers equaled the pre-recession levels of early 2008.

“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," Bisignani said. "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.

“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, outdated 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."



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By George Dooley | December 30, 2010
The level of international air travel is now 4 percent higher than the pre-recession peak of early 2008.
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