However, January Demand Shows Further Improvement
The
International Air Transport Association (IATA) released data
Tuesday showing that January 2010 demand statistics for
international scheduled air traffic that showed continuing
improvement. Compared to the previous year, January passenger
demand was up 6.4%. Against this improving demand, a 1.2% increase
in passenger capacity in January pushed load factors to 75.9% (up
from the 72.2% recorded for January 2009).
International cargo demand showed a 28.3% improvement with only
a 3.7% increase in capacity. This pushed the cargo load factor to
49.6% which is a step-change from the 40.1% recorded in January
2009.
The large increases in year-on-year comparisons reflect a steady
improvement from the precipitous fall in demand that characterized
the early part of 2009 rather than a dramatic improvement in
January. Compared to December 2009, and adjusting for seasonal
variations, passenger demand grew by 0.5% while air freight volumes
increased by 3.0%.
“Airlines have lost 2-3 years of growth. Demand is moving
in the right direction. The 3.0% increase in freight volumes from
December to January is particularly encouraging. We can start to
see the future with some cautious optimism, but better volumes do
not necessarily mean better profits. Passenger yields are still 15%
below peak. And we expect 2010 losses to be US$5.6 billion,”
said Giovanni Bisignani, IATA’s Director General and CEO.
There are large geographical differences in the improvements.
The strongest upturns have been seen in markets where economic
recovery from the recession has been strongest—Asia, Latin
America and the Middle East.
Compared to the low point in the cycle (February 2009)
international passenger traffic is up 8.6%. The market has not yet
recovered from the losses of 2008 and early 2009. Demand must
improve by a further 2% to return to the peak levels of early
2008.
Asia Pacific carriers experienced a 6.5% increase in demand
compared to the previous year. Of the improvement in demand seen
since the early 2009 low point, 31% has been realized by carriers
in the region which is leading the global economic recovery.
Carriers in North America and Europe saw demand increase by 2.1%
and 3.1% respectively. Although both regions have gained 6% from
the early 2009 lows, they remain 4-6% below the early 2008 peak
levels. This reflects the jobless recovery from the recession in
which consumers are focused on paying down debt. In other regions,
Middle Eastern carriers grew throughout the recession, and growth
accelerated to 23.6% in January. Latin American carriers saw demand
increase by 11% in January on the back of a strong regional
economy, and African carriers recorded a 6.3% improvement in
January, assisted by robust regional economic activity.
Compared to the low point in the cycle (December 2008-January
2009), international freight traffic has regained about 28%. This
is still 3-4% below the early 2008 peak level.
The sharp improvement in air freight, which accelerated to 3.0%
in January compared to December, is being driven by businesses
re-stocking depleted inventories. This part of the inventory cycle
will not last much longer. Durable air freight growth will require
consumers to start buying again and businesses to return to making
investments. While these improvements are beginning to be seen in
Asia, Europe and North America lag behind.
With an 11.6% improvement in January compared to the previous
year, carriers in Europe stand out for their sluggish demand
recovery. Freight volumes are only 7% above the December 2008 low
and 15% below the cycle peak. "We are starting to see some
encouraging signs in demand, albeit with large differences among
the regions. Unfortunately the constraints of the archaic bilateral
system limit airlines from being able to respond as normal
businesses to market opportunities. We cannot behave like normal
businesses. Political borders limit opportunities for
consolidation. And we still require governments to negotiate open
markets” said Bisignani.
Under the auspices of IATA’s Agenda for Freedom
initiative, in November 2009, seven governments (Chile, Malaysia,
Panama, Singapore, Switzerland, the United Arab Emirates, and
the United States) and the European Commissions signed a
multilateral statement of policy principles focused on
liberalization of the air transport industry. Premised on
maintaining a level playing field, the policy principles support
liberalization of ownership, market access and pricing. Its latest
impact can be seen in the recent signing of an open skies bilateral
agreement between Panama and Colombia.
“With each open skies bilateral, we take a step in the
right direction. Recovering from the years of lost growth as a
result of this crisis is a long and hard journey. Governments
should not make it any more difficult by maintaining policies that
restrict airlines ability to do business,” said
Bisignani.