Continued slowdown in air traffic

The September increase was down on the 5.3 per cent year-on-year growth rate in August and well below the 6 per cent average growth rate seen throughout the first half of the year. Capacity increased by 3.1 per cent over the year-ago period, and the load factor stood at 80 per cent, up 0.7 per cent points compared to September 2011.

According to IATA, the minor 0.6 per cent year-on-year growth posted for air cargo is less significant than the 0.6 per cent fall in air freight volumes between August and September which is more indicative of the trend. This is the second notable month-on-month fall in air freight growth in as many months. This has eroded the stability in volumes achieved earlier in 2012. Capacity was trimmed 0.6 per cent compared to year-ago levels. This strengthened the freight load factor slightly to 45.6 per cent from 45.1 per cent a year ago.

“A ‘two-speed’ recovery is emerging into a ‘multi-speed’ reality. Carriers in China, Latin America and the Middle East are growing strongly. Europe’s airlines are experiencing profitless growth in a strategy to manage high fixed costs and taxes. In Africa the challenge is to turn growth opportunities into profits. But for North American airlines the focus is on tightly managing capacity in order to optimize profits in a slow to no-growth environment. Asia-Pacific carriers outside of China are a mixed bag. Robust growth in China is being tempered by faltering markets in Japan and India,” said Tony Tyler, IATA’s Director General and CEO.

“Putting regional diversity aside, the fact that airlines are making any money at all with weak markets and high fuel prices is a tribute to their strong business performance, as evidenced by maintaining global load factors close to 80 per cent since the start of 2012. Even with that, airlines are expected to eke out a global net profit margin of only 0.6 per cent. It’s a tough year,” said Tyler.

In the month, only Asia-Pacific carriers experienced a decline compared to August. Capacity rose 3.1 per cent for the month, pushing the load factor up 1.3 per cent points to 80.9 per cent compared to a year ago.

European airlines experienced 5.4 per cent growth on international services compared to September 2011, the strongest performance among the major regions despite recession conditions in Europe. With capacity up 3.5 per cent, the load factor reached 83.9 per cent, up 1.5 per cent points on September 2011, and the second highest among the regions.

Asia-Pacific was one of the weakest regions, as demand rose just 1.7 per cent year-on-year. Compared to August, the region recorded a 0.3 per cent decline—the only region to do so. Tight capacity management, however, meant that the load factor rose 1 per cent point versus last year to 77.2 per cent.

North American airlines’ international traffic climbed 2.1 per cent for the month, while capacity declined 0.2 per cent, with the load factor reaching 84.6 per cent, the highest for any region and a 2 per cent point rise over September 2011.

Middle East carriers experienced by far the strongest traffic growth, with demand up 13.3 per cent year-on-year. This was down compared to the 17 per cent growth recorded in August but the growth comparison for August was inflated by seasonal impacts, with Ramadan dampening traffic growth during August 2011. September capacity rose 11.3 per cent and the load factor strengthened to 78.7 per cent.

Latin American airlines posted growth of 7.5 per cent, second highest among the regions. Capacity climbed 6.2 per cent—also the second highest—and the load factor rose 0.9 per cent points to 78.2 per cent. Compared to August, traffic rose 2.7 per cent, the strongest month-on-month performance for any region. 

African airlines’ traffic climbed 4.7 per cent year-on-year, on a 3 per cent rise in capacity. The load factor was 71.6 per cent, the lowest of any region but a 1.2 per cent point rise over last year.