IATA: September Passenger Traffic Rises

IATA: September Passenger Traffic Rises
By George Dooley
       
Passenger traffic was 5.6 percent in September - higher than the same month last year -and stronger than the 4.6 percent year-on-year growth recorded in August, the International Air Transport Association (IATA) reports. IATA Air freight on the other hand posted a 2.7 percent contraction for September compared to September 2010. This is a further deterioration from the 2.4 percent decline recorded in August, IATA said.

“September’s strength in passenger demand was a pleasant surprise. Freight demand contracted for a fifth consecutive month and this trend is in line with falling business and consumer confidence. We are still expecting a general weakening in passenger traffic as we head towards the year-end,” said Tony Tyler, IATA’s director general and CEO.

International air travel volumes rebounded to levels reached in July, following a dip in August, IATA said. "The sharp decline in business confidence in most economies, and the weakness in U.S. and European consumer confidence, suggest reluctance for both business and leisure travel. Continuing strong air travel markets may reflect the robust conditions in emerging markets and travel booked earlier in the year when there was more economic optimism," IATA said.

Passenger load factors stood at 79.5 percent in September, slightly below the 80.1 percent recorded for the same month last year. Highest load factors were recorded in North America (82.6 percent) and Europe (82.4 percent). The load factor for Asia-Pacific airlines slipped to 76.0 percent as the region absorbs the largest number of new aircraft deliveries.

Latin America carriers reported the largest increase in demand at 10.6 percent (up from a 6.4 percent increase in August), supported by robust economic conditions.

European carriers saw a 9.2 percent increase, slightly behind the 9.5 percent increase in capacity. This comes despite the continuing Eurozone crisis, IATA said. The weak Euro is enhancing Europe’s attractiveness to tourists and creating export opportunities for business. North American carriers recorded a 1.2 percent increase in demand, the weakest among the regions. It lagged behind a 2.9 percent increase in capacity.

Despite stronger than expected growth in passenger markets during September, the industry is bracing for more difficult times ahead, IATA said. IATA’s recent Airline Business Confidence survey reported a significant decline in profitability expectations over the next 12 months.

More worrying is the expectation that unit costs will increase with little optimism for yields, IATA said. The majority expected no change in passenger yields while 90 percent of respondents were split equally among those expecting cargo yields to remain the same or decline. IATA said it is expecting profitability to decline from $6.9 billion in 2011 to $4.9 billion in 2012 for a margin of just 0.8 percent.