IATA: Demand rising but challenges remain

The International Air Transport Association has released traffic results for the first six months of the year
showing 6.3% growth in year-on-year international passenger demand,
slightly higher than the 5.9%  full-year rise recorded for the year
2006.However, passenger demand growth weakened to 5.3% for the month of
June, the lowest growth rate in nine months.

Freight demand for the first six months of 2007 grew 2.7%, well below
the 4.6% growth recorded for the full-year in 2006. While year-to-date
demand growth is weaker than forecast, June year-on-year demand for
freight grew 4.9%. This is the second consecutive month of strengthening
demand for freight, following the 5.0% growth recorded in May, and could
be indicating a return to historical growth levels in the 5-6% range.


Average passenger load factors were 75.7% during the first half of the
year, up 0.6% over the same period in 2006. “A focus on efficiency, with
careful capacity management, is keeping load factors at record levels.
But the challenge will get tougher. Over the next 18 months almost 1,800
new aircraft will be delivered-equal to 10% of the existing fleet,” said
Giovanni Bisignani, Director General and CEO of IATA.



Asia-Pacific’s carriers will receive the biggest share (35%) of the new
aircraft, to meet demand in the fast-growing Chinese and Indian markets.
With a stronger emphasis on fleet replacement, but also to meet demand
growth, European airlines will take delivery of 26% and North American
airlines will take on 25%. “The new aircraft, operated efficiently with
high load factors, will keep us on target to improve fuel efficiency 25%
by 2020,” said Bisignani.


The Middle East led all regions with passenger demand growth of 17.8%
that outpaced capacity growth and boosted load factors during the first
half of the year. Africa followed with 9.9% thanks to improving links
with Asia and the Middle East.  Asia demand rose 6.0% due to favourable
economic conditions followed by North America (5.2%), Europe (4.9%) and
Latin America (0.7%). 


Air freight demand growth was led by airlines in the Middle East during
the first half of the year at 11.7%. Demand growth in Asia Pacific rose
4.6% during the same period although demand surged to 7.4% in June
following a 7.6% increase in May. Demand growth in Europe was sluggish
(0.7%) and contracted in North America (-1.2%) and Latin America (-3.8%).


“Strong passenger demand means that record numbers of people are
expected to travel in August. Harmonised security measures across
borders are more critical than ever. The US-EU agreement on the sharing
of passenger data, signed this month, was a step in the right direction.
But governments must focus much more on further harmonisation to ensure
that effective security is also convenient for passengers. A particular
focus will be the UK, where unique screening policies inconvenience
passengers with no improvement in security. The only beneficiary is the
airport operator-BAA-that continues to deliver embarrassingly low
service levels by failing to invest in appropriate equipment and staff
to meet demand. This must stop,” said Bisignani.