IATA Reports Continued Growth in Air Traffic Demand

The International Air Transport Association (IATA) announced that March 2010 international scheduled air traffic showed continued strengthening of demand. Compared to March 2009, passenger demand was up 10.3 percent, while cargo demand grew 28.1 percent. Both are improvements over the 9 percent and 26.3 percent growth for passenger and freight demand, respectively, recorded in February.

Although these are strong gains, the data is being compared to March 2009, which was the low point for international air travel during the recession. “March results show that the pace of the upturn is strong. But the trauma of the recession is not over. The industry has lost two years of growth, and passenger and freight markets are still 1 percent below early 2008 highs.

Nonetheless, the pace of improvement, based on an improving global economic situation, is much faster than anybody would have expected even six months ago,” said Giovanni Bisignani, IATA’s director general and CEO. IATA noted that the International Monetary Fund revised global GDP growth forecasts from 3 percent to 4.3 percent for 2010.

With a 78 percent load factor recorded in March, passenger load factors remain at record highs. While demand expanded by 10.3 percent in March, capacity increases stood at 2 percent, boosting the load factor and creating much tighter supply and demand conditions.

Global capacity remains 3 to 4 percent below pre-crisis levels. International freight markets are also experiencing tighter supply and demand conditions. The 28.1 percent improvement in demand outpaced the 5.3 percent capacity expansion in March. This drove freight load factors to 57.1 percent -- the highest since November 2002 when international freight load factors stood at 58.8 percent.

North American carriers posted a traffic growth of 7.8 percent, lagging the global average, although considerably improved from the 4.4 percent recorded in February. Uncertainty over government budget cuts and tax increases is dampening demand for air travel, compared to other regions, particularly Asia-Pacific. North American carriers posted the highest load factor among the regions (81.6 percent) as a result of continuing careful capacity management.

Latin American carriers posted the weakest growth of any region, increasing only 4.6 percent in March. This is in sharp contrast to February when the region’s carriers grew by 8.5 percent. The reduction is largely due to the impact of the earthquake in Chile.