IATA Reports Air Traffic Drops, Hurting Profits

The International Air Transport Association (IATA) released international traffic data for April. Year-on-year international passenger demand grew by 3 percent in April. Capacity growth of 5 percent saw load factors fall to 75.4 percent.

This is a 1.5 percent drop from the 76.9 percent recorded during the same period last year and the third consecutive monthly year-on-year decline. International cargo demand growth remained sluggish at 3.7 percent. April figures contain several distortions.

The impact of an early Easter holiday in 2008 will have reduced comparative year-on-year traffic growth by about 2 percent in April. At the same time the 10 percent transatlantic capacity increase with the commencement of the U.S.-EU Open Skies is estimated to have boosted global traffic by about 1 percent.

Adjusting for these distortions and leap year, underlying passenger traffic demand increased 4 percent in April and the three previous months. Unadjusted traffic figures for April indicate significant differences by region: Europe recorded 1.6 percent year-on-year growth, down from the 3.7 percent recorded in March.

North American carriers recorded 3.8 percent demand growth in international passenger traffic as capacity continued to shift to international markets. This was outstripped by capacity expansion of 6.2 percent. Moreover it is down from the 6.3 percent year-on-year growth recorded in March.

Asia Pacific carriers saw 2.6 percent growth in demand, down from 4.3 percent in March as a result of the slowing Japanese economy. Particularly impacted were long-haul routes to North America and Europe. Middle Eastern airlines saw an 11 percent increase in traffic due to soaring oil revenues, developing tourism and additional airport and airline capacity.

Latin American airlines saw a 4 percent increase. This is down from the 19.7 percent recorded in March as the impact of the significant industry restructuring in 2007 wears off. Africa continued its free-fall with a 5.6 percent contraction in traffic and an 8.7 percent reduction in capacity.