The International Air Transport Association (IATA) released traffic results for May that showed 5.5% growth in year-on-year international passenger demand. Growth in freight demand rose to 5.0% (up sharply from 2.8% in April). This was the largest increase since September 2006. Average load factors remained strong at 73.7%, up 0.1% year-on-year.

“The pick-up in freight, led by Asia, could be the first sign of strengthening demand. Over the next months we will be closely watching the impact of several changing conditions, including intensifying competition from other modes of transport and structural changes such as manufacturers producing lighter goods. On the passenger side, growth has stabilised while strong competition is keeping load factors high even as carriers aggressively expand international routes to take advantage of some liberalising markets,” said Giovanni Bisignani, IATA’s Director General and CEO.

Airlines in the Middle East saw the strongest passenger demand growth in May with a 19.6% increase that also boosted load factors to 70.8%. African airlines recorded demand growth of 11.2 %, driven by improved regional economic performance and growing links with Asia and the Middle East. Latin American airlines showed the first demand growth in a year with a 4.2% increase, following airline restructuring.  Of the three largest regions, Asia Pacific recorded 5.1% growth, while Europe recorded a slower 3.2% increase due to increased competition from new entrants and no-frills carriers.  North American demand rose 4.2% while recording the highest average load factor of all regions at 80.4%.

Air freight demand growth was led by airlines in the Middle East at 10.5%. However, Asia Pacific airlines drove overall freight growth, with demand doubling from 3.8% in April to 7.6% in May, reflecting the strong levels of economic and trade growth in the region. Air freight demand growth remained sluggish in North America (2.6%), Europe (1.6%) and Latin America (1.1%) while African air freight demand (-3.6%) dropped sharply.

“The industry is expected to turn a profit of US$5.1 billion in 2007—the first black number since 2000. High load factors are part of the efficiency gains driving the return to profitability. They are also improving our environmental performance. Combine this with the impressive investments in more fuel-efficient fleets that we saw again at the Paris Air Show last week, and you can see an industry that is on target for a projected 25% increase in fuel efficiency by 2020,” said Bisignani.
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