Shifting gears downward
The global aviation industry witnessed slower demand in August, as year-on-year passenger demand falling from 6 per cent in July to 4 per cent while freight markets' contraction doubled from 1.8 per cent in the previous month to 3.8 per cent.
“The industry has shifted gears downward. The pace of growth in passenger markets has dipped and the freight business is now shrinking at a faster pace. With business and consumer confidence continuing to slump globally there is not a lot of optimism for improved conditions any time soon,” said Tony Tyler, director-general and CEO of the International Air Transport Association (IATA).
International passenger demand was up 6.2 per cent in August compared to the previous year. However, when compared to July, demand contracted by 1.8 per cent. Asia-Pacific carriers reported 5.3 per cent demand growth for August, slightly below a 5.6 per cent capacity expansion. This is slightly better than the year-to-date growth of 4.4 per cent, reflecting the recovery in Japanese international travel. Load factors of 78.9 per cent were below the industry average of 81.2 per cent.
Year-to-date domestic demand is up 3.6 per cent on 2010. However, domestic demand in August shrank by 1.0 per cent compared to July, which brought the August 2011 growth rate down to 1.5 per cent. The largest source of weakness in absolute terms was the 0.3 per cent fall in the US compared to the previous year. US domestic travel accounts for about half of all domestic travel.
Japanese domestic demand was down 12.4 per cent compared to the previous August. Traffic was up strongly in August and has now recovered to within 9 per cent of pre-earthquake and tsunami levels.
Chinese domestic travel demand was up only 2.8 per cent on the previous August. While positive, it is well below the double digit growth seen in 2009 and for much of 2010.
India recorded demand growth of 19.7 per cent, the top performer among domestic markets, followed by Brazil. Combined these markets represent 3 per cent of worldwide air travel limiting the impact of their strong performance on the global industry.
Global freight markets are also showing clear signs of decline. During the second half of 2010, weakness in air freight represented a loss of market share to other transport modes. In 2011 air freight reflected the lack of growth in overall world trade volumes. This latest decline shows a further deterioration in global economic conditions.
The decline has been most prominent in the largest markets. North American carriers reported a 7 per cent fall in cargo volume for August (compared to the previous year), followed by carriers in Asia-Pacific (-5.4 per cent) and Europe (-1.8 per cent).
