Good news continues for airlines as passenger growth surges past pre-crisis levels


Issues & Trends – December 2010/January 2011

Good news continues for airlines as passenger growth surges past pre-crisis levels

LATEST IATA international air traffic statistics (for October) continue the buoyant results of the past few months showing a 10.1 per cent year-on-year increase in passenger demand. This is slightly below the 10.7 per cent recorded in September, but both months are an improvement over August.

Said IATA director general Giovanni Bisignani: “As we approach the end of 2010, growth is returning to a more normal pattern. “Passenger demand is five per cent above pre-crisis levels of early 2008…

“Where we go from here is dependent on developments in the global economy. The US is spending more to boost its economy. Asia outside of Japan is barrelling forward with high-speed growth. And Europe is tightening its belt as its currency crisis continues.

“The picture going forward is anything but clear, but for the time being, the recovery seems to be strengthening.”

Bisignani observed that improvements in demand are being met by a cautious approach to capacity expansion.

Over the first 10 months of 2010, passenger demand grew by 8.5 per cent against a capacity expansion of four per cent.

Forward schedules indicate a continuation of this trend, with a 7.5 per cent passenger capacity increase planned for the half-year scheduling period that began October 31.

• Asia-Pacific carriers posted a 7.3 per cent demand increase, ahead of a 5.3 per cent increase in capacity. Volumes remain one per cent below the pre-crisis levels of early 2008.

• North American airlines achieved their fastest growth rate for the year in October, posting a 12.4 per cent demand increase over October 2009. With a capacity increase of 11.9 per cent, the load factor for North American airlines was pushed to 82.5 per cent, the highest level globally. The region’s airlines are carrying two per cent more traffic than in the pre-recession period of 2008.

• European carriers showed a 9.6 per cent increase over October 2009, and passenger numbers are now four per cent above pre-recession levels.

• Middle East carriers recorded the strongest growth for the month with an 18 per cent increase in demand. This is despite the earlier Ramadan dates which negatively skewed the numbers. The region also had the largest capacity expansion at 13.7 per cent compared to October 2009.

• The latest traffic results have fed into a dramatic 70 per cent upward revision of IATA’s profit forecast for airlines around the globe in 2010. But the world airline body is tempering its enthusiasm for the improved results with a warning that airline margins are still “pathetic”.

 

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