Demand Improvements Continue in March – Expect Volcano-Related Dip in April
Geneva – The International Air Transport Association (IATA) announced that March 2010 international scheduled air traffic showed continued strengthening of demand. Compared to March 2009, passenger demand was up 10.3%, while cargo demand grew 28.1%. Both are improvements from the 9.0% and 26.3% growth for passenger and freight demand recorded in February.
These are strong gains, but the data is being compared to March 2009, which was the low point for international air travel during the recession. “March results show that the pace of the upturn is strong. But the trauma of the recession is not over. The industry has lost two years of growth, and passenger and freight markets are still 1% below early 2008 highs. Nonetheless, the pace of improvement, based on an improving global economic situation, is much faster than anybody would have expected even six months ago,” said Giovanni Bisignani, IATA’s Director General and CEO. IATA noted that the International Monetary Fund revised global GDP growth forecasts from 3.0% to 4.3% for 2010.
With a 78.0% load factor recorded in March, passenger load factors remain at record highs. While demand expanded by 10.3% in March, capacity increases stood at 2.0%, boosting the load factor and creating much tighter supply and demand conditions. Global capacity remains 3-4% below pre-crisis levels.
International freight markets are also experiencing tighter supply and demand conditions. The 28.1% improvement in demand outpaced the 5.3% capacity expansion in March. This drove freight load factors to 57.1% — the highest since November 2002 when international freight load factors stood at 58.8%.
International Passenger Demand
Regional demand patterns continue to reflect the asymmetrical nature of the economic rebound.
- Asia-Pacific carriers posted strong demand growth of 12.6%, against a capacity expansion of 1.3%. The strength of the rebound in the region’s economies is supporting Asia-Pacific’s demand improvement. China’s economy grew by 11.9% in the first quarter while India’s economy is growing by 7.0%. There is also greater optimism for a return to economic growth in Japan.
- European carriers posted traffic growth of 6.0%, considerably weaker than the global improvements, but better than the 4.0% growth in February. This is the result of sluggish home economies and continuing high unemployment rates. European carriers reduced capacity by 0.8% compared to the previous year.
- North American carriers posted a traffic growth of 7.8%, lagging the global average, although considerably improved from the 4.4% recorded in February. Uncertainty over government budget cuts and tax increases is dampening demand for air travel, compared to other regions, particularly Asia-Pacific. North American carriers posted the highest load factor among the regions (81.6%) as a result of continuing careful capacity management.
- Middle Eastern carriers recorded the strongest traffic growth at 25.9%. While economic growth of 5% in the region is supporting some of this increase, a large part is attributed to market share gains on long-haul markets, connecting passengers over Middle Eastern hubs. Load factors of 76.2% were slightly below the global average.
- African carriers are now starting to see improving growth, having suffered market share declines for several years. During March, demand was up 13.6% and load factors grew to 67.4% for the month.
Latin American carriers posted the weakest growth of any region, increasing only 4.6% in March. This is in sharp contrast to February when the region’s carriers grew by 8.5%. The reduction is largely due to the impact of the earthquake in Chile.
International Cargo Demand
Global air freight is now within 1% point of recovering to its previous high point of early 2008. International air freight volumes shrank by over one quarter during the second half of 2008. The upturn in the business inventory cycle has almost eliminated that decline, although the upturn for international air freight has taken twice as long as the collapse.
Despite the sluggish US economy, North American carriers have seen an international freight rebound (+32.2%). Both export and import volumes are very strong in the emerging economies of Asia-Pacific (+34.1%) and in Latin America which recorded the strongest growth at 47.9%.
European carriers showed the weakest improvement in freight demand at 11.7%, largely due to the slow economic recovery in the region.
The strong traffic recovery is expected to show a dip in April as a result of the eruption of an Icelandic volcano in April that saw the shutdown of large portions of European airspace over a six-day period. “European carriers were already showing the weakest recovery from the financial crisis through March. The volcanic ash crisis hit the weakest part of the industry the hardest. The majority of the US$1.7 billion in lost revenues was by Europe’s carriers. Passenger confidence is not affected and we expect a quick rebound. The combined impact of lost business and added costs will certainly hit the bottom line,” said Bisignani.
March Aviation Traffic Results
| Mar 2010 vs. Mar 2009 |
RPK Growth |
ASK Growth |
PLF |
FTK Growth |
AFTK Growth |
| Africa |
13.6% |
11.0% |
67.4 |
45.8% |
8.9% |
| Asia/Pacific |
12.6% |
1.3% |
79.1 |
34.1% |
12.5% |
| Europe |
6.0% |
-0.8% |
78.1 |
11.7% |
-5.2% |
| Latin America |
4.6% |
-0.7% |
73.3 |
47.9% |
24.6% |
| Middle East |
25.9% |
14.8% |
76.2 |
35.5% |
15.0% |
| North America |
7.8% |
0.6% |
81.6 |
32.2% |
-1.1% |
| Industry |
10.3% |
2.0% |
78.0 |
28.1% |
5.3% |
| YTD 2010 vs. YTD 2009 |
RPK Growth |
ASK Growth |
PLF |
FTK Growth |
AFTK Growth |
| Africa |
10.4% |
8.2% |
67.0 |
34.6% |
7.4% |
| Asia/Pacific |
10.5% |
0.3% |
78.6 |
35.9% |
11.1% |
| Europe |
4.3% |
-0.6% |
75.7 |
10.3% |
-6.6% |
| Latin America |
8.2% |
1.4% |
77.0 |
40.3% |
22.2% |
| Middle East |
25.0% |
15.8% |
75.1 |
34.0% |
17.0% |
| North America |
5.0% |
-1.5% |
78.4 |
31.6% |
-3.0% |
| Industry |
8.6% |
1.6% |
76.6 |
27.8% |
4.0% |
Notes for Editors:
- IATA (International Air Transport Association) represents some 230 airlines comprising 93% of scheduled international air traffic
- Explanation of measurement terms:
- RPK: Revenue Passenger Kilometres measures actual passenger traffic
- ASK: Available Seat Kilometres measures available passenger capacit
- PLF: Passenger Load Factor is % of ASKs used. In comparison of 2009 to 2008, PLF indicates point differential between the periods compare
- FTK: Freight Tonne Kilometres measures actual freight traffi
- AFTK: Available Freight Tonne Kilometres measures available total freight capacit
- FLF: Freight Load Factor is % of AFTKs used
- IATA statistics cover international scheduled air traffic; domestic traffic is not included
- All figures are provisional and represent total reporting at time of publication plus estimates for missing data. Historic figures may be revised
- International passenger traffic market shares by region in terms of RPK are: Europe 37.6%, Asia-Pacific 28.8%, North America 15.2%, Middle East 11.0%, Latin America 4.1%, Africa 3.3%
- International freight traffic market shares by region in terms of FTK are: Asia-Pacific 44.9%, Europe 24.7%, North America 15.9%, Middle East 10.4%, Latin America 2.8%, Africa 1.3%
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