Hurricane Sandy Added to Aviation Industry Challenges in October
The International Air Transport Association (IATA) announced global traffic results for October showing a persistent softening of passenger traffic growth and a significant deterioration in freight demand.
Passenger demand rose 2.8% compared to October 2011, but declined 0.5% compared to September. Capacity increased by 2.3% over the year-ago period, and load factor rose 0.4 percentage points to 78.8%
October international passenger demand was up 3.2% compared to the year-ago period, but contracted 0.2% compared to September. Several regions saw demand weaken compared to the prior month but in some cases results were affected by Hurricane Sandy, which struck the US East Coast in late October. International capacity rose 2.2% year-over-year and the load factor rose 0.8 percentage points to 78.3%.
North American airlines’ international traffic rose 0.2% compared to October 2011 after rising 2.1% in September. However, seat capacity declined 2.2%-reflecting the impact of Sandy--and load factor rose 2 percentage points to 82.2%, the highest among the regions. Demand declined 0.9% compared to September.
Latin American airlines posted growth of 6.8%, second best among the regions, although this was eclipsed by a 7.6% rise in capacity that pushed load factor down to 76.2% from 76.8%. Compared to September, traffic declined 0.5%. The export-dependent continent remains vulnerable to declines in global demand, but in the second half of the year major economies like Brazil have shown signs of acceleration in economic growth. In September, consecutive quarterly expansion in GDP growth marked an upturn in the Brazilian economy, helping maintain demand for air travel.
Hurricane Sandy was the big news story of October for the aviation industry. In total, nearly 17,000 flights were cancelled to the five most affected airports (the three New York area airports of John F. Kennedy, Newark and LaGuardia as well as Washington-Dulles and Philadelphia). At the peak of the storm on Monday 29 October 8-9% of global capacity was grounded which is equal to 1.6 billion available seat kilometers.
A conservative estimate of lost revenues as a result of the hurricane is $0.5 billion. While there would be some savings from unused fuel, additional costs including those for passenger care and out-of-position crew would have been incurred.
