Global air travel shrinks in March

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3rd May 2011
Global air travel shrinks in March

The growth rates of global passenger aviation fell sharply in March due the Japanese earthquake, disruptions in the Middle East and higher fuel prices, however air freight continued to rebound strongly, according to the latest figures from the International Air Transport Association (IATA).

Compared to February, global passenger demand in March 2011 fell by 0.3% in March, while cargo demand expanded by 4.5%.

For March, year-on-year growth in passenger demand slowed to 3.8% from the 5.8% recorded in February. Conversely, year-on-year growth in freight markets rebounded to 3.7% in March from the 1.8% recorded in February.

“The profile of the recovery in air transport sharply decelerated in March. The global industry lost 2 percentage points of demand as a result of the earthquake and tsunami in Japan and the political unrest in the Middle East and North Africa (MENA),” said Giovanni Bisignani, IATA’s Director General and CEO.

The impact of the events in Japan on global international traffic was a 1% loss of traffic in March. Looked at regionally, Asia-Pacific carriers saw a traffic loss of over 2%, North American carriers had a 1% drop and Europe’s carriers a 0.5% fall. Japan’s domestic market was the most severely impacted with a 22% fall in demand.

CONTINUES BELOW

The disruptions in MENA cut international travel by 0.9 percentage points. Egypt and Tunisia experienced traffic levels 10-25% below normal for March. Military action in Libya virtually stopped civil aviation to, from and within that country.

Capacity adjustments lagged behind the sudden drop in demand. Against global demand growth of 3.8%, capacity expanded by 8.6%. The average load factor fell by 3.5 percentage points to 74.6%.

Europe’s carriers saw demand levels of 5.3% above March 2010. This was down from the 7.4% year-on-year growth in February. Long-haul business travel is strong (except to Japan) but weak economic prospects continue to dampen intra-European traffic.

North American carriers saw a 3.7% year-on-year improvement in demand in March. This was a 3 percentage point tumble from the 6.7% growth recorded in February.

Asia-Pacific carriers saw the broadest negative turn of fortunes in March. Compared to the previous year passenger demand was flat. Compared to February however demand contracted by 2.2% while 0.8% was added to capacity. This led to a sharp 2.3 percentage point fall in load factors to 74.2% in March.

Latin American carriers experienced a 22.2% increase in demand compared to the previous March which was severely depressed due to the earthquake in Chile.

Middle East carriers saw year-on-year demand growth fall from 8.3% in February to 5.6% in March. Compared to the previous month (February) demand was up by 0.1% while capacity expanded by 0.8%. This pushed the load factor down 0.6 percentage points to 73.2%.

African carriers saw demand fall 7.0% compared to the previous March. This is an improvement from the 9.7% drop recorded in February. Compared to the previous month, the region saw demand expand by 6.5% against an increase in capacity of 6.2%.

International Air Freight
From the second half of 2010 until January 2011, international air freight expanded in tandem with the growth in world trade at an annualized rate of about 10%. This was dented in February 2011 when growth, for a number of factors, fell to 1.8% over the same month in the previous year.

Asia-Pacific carriers, which account for 43% of global freight markets, saw air freight demand contract by 0.6% in March compared to the previous year.

Compared to the previous March, cargo traffic carried by European and North American carriers was up 6.1% and 7.1% respectively.

Middle East and Latin American carriers reported year-on-year freight demand increases in March of 10.1% and 10.4% respectively. African carriers reported the worst performance for March 2011 with a 2.8% fall in demand compared to March 2010.

Looking Ahead
The second quarter is likely to see continued depressed air travel markets due to the events in Japan and MENA. However, strong underlining economic growth trends should support recovery in both passenger and cargo markets in the second half of 2011.

“The big uncertainty is the price of oil. Even in the $120 a barrel range, it appears that strong economic growth in markets outside of Europe is continuing. We see this in the strong demand from business for premium travel which maintained 7.7% growth through February. But many leisure travellers are putting off flying because of the impact of high oil prices,” said Bisignani.

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