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News
Two Years of Lost Growth
-Slow Improvement
Trend-
Geneva - The International Air Transport Association (IATA)
reported international scheduled traffic results for October 2009 showing
improving conditions. Passenger demand was up 0.5% compared to October
2008. Demand for international cargo rose to 0.5% below previous
year levels. This is significantly better than the 5.4% decline recorded
in September. Load factors for passenger and cargo continue at
pre-recession levels of 78.0% and 54.1% respectively.
The improvement that started since passenger traffic hit bottom in March
is similar to the pace of growth in 2006 and 2007. Without an exaggerated
rebound from pent-up demand, there will be no rapid catch-up to the
growth trend established in the 2005 to early-2008 period. “The crisis
has cost the industry two years of growth. Adjusting costs and capacity to
meet that reality will be challenging,” said Giovanni Bisignani, IATA’s
Director General and CEO.
The improvement in load factors to pre-recession levels is largely the
result of careful capacity management. Compared to October 2008, overall
passenger capacity was down 3.3%. Stripping out seasonal fluctuations,
passenger capacity has been essentially flat throughout 2009. Responding
to the precipitous fall in cargo demand, October cargo capacity was 7.4%
below the previous year’s levels.
Cargo capacity adjustments have come with many freighters being put into
storage or retired, resulting in a fleet reduction of 4.9%. In contrast,
the passenger fleet continues to expand by 1.8% as new deliveries more
than offset those being stored or retired. Aircraft utilization for both
wide and narrow-body aircraft is now 6% below early 2008 levels. This low
asset utilization is increasing operating costs.
Yields remain under severe pressure. Although there has been a modest
rise in air fares since mid-year, it remains around 20% less expensive to
fly in real terms today than it was a year ago.
International
Scheduled Passenger Demand
- Passenger
demand is now 6% better than the low point reached in March 2009,
but 5% below the peak recorded in early 2008.
- Compared to
September, seasonally adjusted passenger volumes rose by 0.8%.
Carriers in all regions except the Asia-Pacific, Middle East and
North America saw improved demand in October compared to September.
- Asia-Pacific
carriers saw demand grow 0.9%, lower than the 2.1%
recorded in September. The carriers in this region, together
with the European carriers, have seen demand rise the most from
their low points.
- While European carriers saw
a demand decline of 3% in October, it is an improvement from the
-4.2% in September. European carriers demand is still below
the levels from last year due to weakness across the Atlantic and
within Europe.
- North
American carriers saw significant growth in
international traffic through the middle of 2009. Very significant
capacity cuts across both the Atlantic and Pacific have reduced
traffic carried in October to -2.6% below 2008 levels.
- Middle
Eastern carriers saw demand grow 14.3% (compared to
18.2% in September), the highest among the regions. The
region’s carriers continue to add capacity, increasing 15.3% in
October and outpacing the growth in demand.
- Latin
American carriers saw significant increases in the
demand for air travel, growing 9% compared to 3.4% in
September. The region’s carriers continue to add capacity,
growing 3.7% compared to 2008
- African
carriers saw the demand decline 2.6% in October, an
improvement from September’s -4.2%.
International
Scheduled Cargo Demand
- Cargo
traffic is 14% above the December 2008 low point, but remains 15%
below the early 2008 peak.
- Compared to
September 2009, seasonally adjusted cargo volumes rose by 2.5%.
Carriers in all regions experienced improved demand conditions in
October compared to September.
- European
carriers saw the biggest weakness in demand with a
fall of 11.3% compared to October 2008 - relatively unchanged from
the 13% drop in September. The region’s carriers were also the most
aggressive in adjusting capacity with a 12.4% cut compared to
previous year levels.
- Middle
Eastern carriers saw demand growth of 18.4%. This
is significantly better than the 3.6% growth experienced in
September and outpaced a capacity increase of 11.2%.
- North
American carriers saw a 0.5% growth in demand
against a 12% fall in capacity.
- Latin
American carriers recorded a 6.7% growth,
significantly higher than the 1.8% in September.
- Carriers in
Asia-Pacific saw demand grow 1.9% compared to
-3.1% in September. The region’s carriers have benefited from
the air freight generated by the earlier and stronger economic
revival in the region, with industrial production now rising
strongly in a number of economies.
- African
carriers saw demand decline 3.8%, an improvement from
the -6.9% in September.
“This recession is re-emphasizing a structural weakness in
the industry. The inability to merge across political borders has created
a hyper-fragmented industry. The industry is financially sick, and the
medicine of cross-border consolidation is off limits due to an archaic
regulatory structure. Market forces should guide our commercial
operations. Instead the bilateral system, established in the 1940’s, puts
governments in control of which markets can be served and limits access
to global capital with ownership restrictions. No other industry faces
such regulatory manacles,” said Bisignani.
Earlier this month, Chile, Malaysia, Panama, Singapore,
Switzerland, the US, the UAE, with the endorsement of the European
Commission, signed a multilateral statement of policy principles focused
on aviation liberalization. These principles aim to promote normal
commercial freedoms for market access, access to capital (ownership) and
pricing on a level playing field. The economic impact of such
liberalization could add 0.86% to national GDPs according to studies by
InterVISTAS.
“Managing through this crisis will require all commercial
tools that every other industry takes for granted. The principles have
been developed by governments covering 60% of global aviation. Now the
challenge is two-fold. States that signed need to apply the principles
themselves while bringing more states on board. The statement of policy
principles is not a panacea, but it is a historic step in the right
direction at a critical time. A financially sustainable aviation industry
is a necessary catalyst for the global economy,” said Bisignani.
View
full October traffic results
-IATA-
Contact:
Anthony Concil
Director Corporate Communications
Tel: +41 22 770 2967
Email: corpcomms@iata.org
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 Kilometers measures actual passenger traffic
- ASK:
Available Seat Kilometers measures available passenger capacity
- PLF:
Passenger Load Factor is % of ASKs used.
- FTK:
Freight Tonne Kilometers measures actual freight traffic
- AFTK:
Available Freight Tonne Kilometers measures available total freight
capacity
- 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 35.1%, Asia-Pacific 29.3%, North America 18.1%, Middle East
11.3%, Latin America 4.4%, Africa 1.8%
- International
freight traffic market shares by region in terms of FTK are:
Asia-Pacific 44.3%, Europe 26.0%, North America 16.5%, Middle East
10.1%, Latin America 2.1%, Africa 0.9%
- Aircraft
utilization data sourced from Ascend
- Press
release: Signing of a Multilateral Statement of Policy
Principles
- IATA
commissioned InterVISTAS to study the potential impact of liberalization
in 12 markets (Australia, Brazil, Chile, India, Mauritius, Morocco,
Peru, Singapore, Turkey, the United Arab Emirates, Uruguay and
Vietnam). InterVISTAS
presentation (pdf)
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