IATA Report Shows Passenger Traffic Down Over Previous Months

The International Air Transport Association (IATA) announced global traffic results for November showing a softening in passenger markets while air cargo markets remained weak compared to levels attained earlier in the year. Passenger traffic was 4.3% above November 2010 levels but this is skewed as November 2010 was a particularly weak month.  The softening in passenger markets becomes apparent when comparing to the previous month (October 2011). This shows a 0.5% decline on a seasonally-adjusted basis.

Freight markets were 3.1% below November 2010 levels despite a 1.1% increase on October 2011 performance.
 
“Weak global economic performance is being reflected in air transport markets. Freight markets have contracted some 4% compared to January. Although passenger markets have had some growth relative to the beginning of the year – about 2% – the trend has been both soft and volatile. Continuing economic uncertainty will likely mean market shortcomings deepening as we enter 2012,” said Tony Tyler, IATA’s Director General and CEO.
 
Globally, passenger load factors have fallen sharply to 76.3% from 78.5% in October. This shows that the weakness in passenger demand is outpacing airlines’ ability to adjust capacity accordingly. Regional differences are sharp. While North American carriers saw a 0.8% decline in travel, carriers in the Middle East experienced a 10.1% increase, followed by 9.0% for Latin American airlines.

International travel markets continue to be weaker than domestic markets. Compared to October, international demand contracted by 1.5% while domestic demand grew by 1.3%. Overall domestic performance was better than that of international markets with 4.7% year-on-year growth in November and an average load factor of 79.2%. Air freight markets continued their decline in line with weak economic performance and falling business confidence. International markets declined by 3.8%. This was offset by 2.0% growth in domestic markets. Nonetheless, system wide demand shrank by 3.1% in comparison with November 2010.

"The year-end holiday season reminds us all of the importance of connectivity and how aviation is a force for good in the world. Global supply chains bring holiday goods to markets. Millions of people are reunited with family and friends. Millions more embark on journeys of discovery or rest and relaxation. Early in the New Year they will be joined by business travelers seeking to grow their businesses by exploring new markets opportunities,” said Tyler.
 
“This year the story of aviation’s importance is even more compelling as governments around the world seek solutions to economic uncertainty. Economic growth is the only durable solution. Aviation can be a catalyst for that growth. But that depends on governments allowing airlines to get on with the business of providing global connectivity. The New Year’s resolution for every government with respect to aviation should be to stop over-taxation or mis-regulation of this vital economic driver,” said Tyler.
 
IATA is estimating the airline industry will make a collective profit of $6.9 billion in 2011 for a net margin of 1.2%. IATA forecasts that this will fall to $3.5 billion in 2012 (0.6% net margin). But the association has warned that the downside risk of the Euro-zone crisis failing to be resolved could lead to losses in excess of $8 billion.

FMI: www.iata.org