Improve, But Costs Rising
Geneva - The International Air Transport Association
(IATA) today announced international scheduled traffic results for
August. Compared to August 2008, passenger demand was down 1.1%, (an
improvement compared to the 2.9% decline in July), and freight demand
fell by 9.6% (also an improvement compared to the 11.3% drop in July).
Compared to August 2008, passenger load factors improved
by 1.2 percentage points to 80.9%. Despite the tighter supply and demand
conditions average fares continue to be depressed (-22% for premium seats
and -18% for economy).
To match capacity with demand, airlines have reduced daily
aircraft utilization in recent months. For example, average daily hours
for the global Boeing 777 fleet dropped by 2.7% to 11.1 hours per day
through the first eight months of the year. Lower utilization helps
load factors, but spreading fixed asset costs over fewer hours in the air
pushes up unit costs.
“Demand continues to improve, but profitability remains
ever distant,” said Giovanni Bisignani, IATA’s Director General and CEO.
“Fares have stabilized, but at profitless levels. Meanwhile cost
pressures are mounting from reduced aircraft utilization and rising oil
prices. The industry is not out of the woods yet,” said Bisignani.
International Passenger Demand:
Compared to the low point of March 2009, seasonally
adjusted passenger demand has improved by 6%, but traffic levels remain
5% below May 2008 when the fall in demand began. All regions, except the
Middle East, saw improved demand conditions in August compared to July:
carriers recorded the most significant improvement
moving from a -7.6% drop in July to -1.6% in August. This
improvement is somewhat exaggerated as August 2008 was the start of
the steep decline in passenger demand for the region’s airlines.
This region is where second and third quarter growth has been
strongest, boosted by massive government and central bank stimulus
packages and fewer problems with consumer debt and bank balance
and North American carriers saw smaller improvements
driven by exposure to more robust long-haul markets, rather than
local economies. European carriers saw demand fall 2.8% compared to
August 2008 (up from the -3.1% recorded for July). For North
American carriers, the improvement was to -2.5% in August compared
to -3.2% in July.
Eastern carriers were the only region to show
year-on-year growth with demand expanding by 10.8%. This is below
the 13.2% recorded in July due to a distortion resulting from the
earlier start of Ramadan compared with last year. Middle East
carriers continue to win market share on long-haul travel via their
American carriers saw demand improve to -2.3% in
August (from -3.5% in July). Passenger confidence, dampened by
Influenza A(H1N1) is returning with the end of flu season in the
carriers showed the weakest demand at -4.9% in August.
This was a slight improvement on the -5.5% recorded in July.
- For 2010
IATA’s latest industry outlook anticipates average international
passenger growth of just over 4.0%, compared to an expected
full-year decline in 2009 of almost 5.0%.
Compared to the low point of December 2008, seasonally
adjusted freight demand has improved by 12%, but remains exceptionally
weak at 16% below April 2008 levels when the fall in demand began. All
regions saw improved demand conditions in August compared to July:
American and the Middle Eastern carriers were the
only regions to report growth of 3.9% and 3.0% respectively.
Pacific carriers, representing 44% of the global
freight market, saw year-on-year demand improve marginally from
-9.5% to -9.0% in August compared to July.
American carriers saw a slightly larger improvement
from -14.6% in July to -12.1% in August. This is similar to the
-16.2% to -14.5% improvement registered by European carriers.
carriers saw the largest improvement - from -25.9% in
July to -5.1% in August. The region’s small market size exaggerates
- For 2010 IATA’s
industry outlook anticipates average international freight growth of
5.5%, compared to an expected full-year decline in 2009 of 14.5%.
“Even with improving demand, there are few bright spots in
the industry. This must point us to the need for some fundamental
re-thinking. At the top of the list for change are the industry’s
antiquated rules of the game which restrict access to markets and to
international capital. This industry needs to operate as a normal
business. Liberalization of ownership rules could be a lifeline for
airlines as we approach a difficult fourth quarter,” said Bisignani.
full August traffic results
Director Corporate Communications
Tel: +41 22 770 2967
Notes for Editors:
(International Air Transport Association) represents some 230
airlines comprising 93% of scheduled international air traffic.
of measurement terms:
Revenue Passenger Kilometers measures actual passenger traffic
Available Seat Kilometers measures available passenger capacity
Passenger Load Factor is % of ASKs used.
- FTK: Freight
Tone Kilometers measures actual freight traffic
Available Freight Tone Kilometers measures available total freight
Freight Load Factor is % of AFTKs used
statistics cover international scheduled air traffic; domestic traffic
is not included.
- All figures
are provisional and represent total reporting at time of publication
plus estimates for missing data. Historic figures may be revised.
passenger traffic market shares by region in terms of RPK are:
Europe 34.9%, Asia-Pacific 29.4%, North America 18.2%, Middle East
11.3%, Latin America 4.4%, Africa 1.7%
freight traffic market shares by region in terms of FTK are:
Asia-Pacific 44.2%, Europe 26.3%, North America 16.3%, Middle East
10.2%, Latin America 2.1%, Africa 0.9%
- Aircraft utilization
data sourced from Ascend