In the Red, Despite Demand
Geneva - The International Air Transport Association (IATA)
announced international scheduled traffic results for July showing
passenger demand declining 2.9% compared to the same month in the
previous year while freight demand was down 11.3%. The international
passenger load factors stood at 80.3%.
The July passenger demand fall of 2.9% was a relative
improvement over the 7.2% drop in June and the 6.8% decline recorded over
the first seven months of the year. July capacity was more in line with
reduced demand than in previous months and load factors are similar to
those recorded in July 2008. These positive developments, however, have
come at the expense of yields which continue to fall sharply.
The 11.3% decline in cargo demand for July was also a
relative improvement over the -16.5% recorded in June and the -19.3%
average for the first seven months of the year. Despite this
improvement, the July freight load factor of 47.6% was lower than the 49%
recorded in July 2008.
“Demand may look better, but the bottom line has not
improved. We have seen little change to the unprecedented fall in yields
and revenues. The months ahead are marked by many uncertainties,
including the price of oil. The road to recovery will be both slow and
volatile. In the meantime, the industry remains in intensive care,” said
Giovanni Bisignani, IATA’s Director General and CEO.
International Passenger Demand
All regions saw improved demand performance compared to
June, but significant differences by region should be noted:
carriers are experiencing the extremes of this recession.
The 7.6% fall in passenger demand compared to July 2008, was the
largest decline of any region. At the same time, compared to the
-14.5% recorded in June, the relative improvement to -7.6% was also
the biggest among all regions. Economic growth returned during the
second quarter in a number of Asian economies, to a much larger
extent than elsewhere. This was likely the driver behind July’s
better performance. The impact on passenger confidence from
Influenza A(H1N1) was also somewhat diminished as media coverage of
the disease decreased.
and North American carriers saw declines of 3.1% and
3.2% respectively. Passengers have been trading down to
cheaper seats in the face of recession pressures. Airlines
have also been leaving less expensive fares open for sale much
longer (closer to departure dates) in the face of excess capacity
and intensifying competition. The July improvement in travel demand
was more the result of deep discounting than stronger incomes or
greater economic confidence.
American carriers saw demand decline by 3.5%. This
was the only region to see a greater decline in July than the seven
month average which is -3.0%.
carriers saw a fall of 5.5% compared to the seven month
average of -8.6%.
Eastern carriers were the only region to grow in
July. The 13.2% growth in July was slightly better than the 12.9%
recorded in June. The growth is fueled by increased capacity and
greater market share in traffic between Europe and Asia.
International Air Freight
Freight demand on international markets was 11.3% lower in
July than a year earlier, but was a considerably better result than the
-16.5% recorded in June. All regions, except Africa, saw improvement in
demand compared to June. The Middle East was the only region to grow.
- Falls by Asia-Pacific carriers,
carriers and North
American carriers were 9.5%, 16.2% and 14.6%
carriers posted the worst performance at -25.9%. This
was the only region to see a deterioration in freight demand
compared to June when the region’s carriers posted a 20.2% decline
compared to the same month in the previous year.
Eastern carriers were the only region to grow,
posting a 1% growth in demand compared to July 2008.
American carriers posted a 1.2% fall in demand
compared to July 2008.
The stabilization of air freight demand in the first
quarter and its improvement in the second quarter has helped reduce the
rate at which excess capacity has been growing. But load factors are
still lower than levels seen at the same time last year. Downward
pressure on freight rates and revenues continued to intensify in July.
“The freight numbers tell an interesting story. The sector
is being boosted as companies re-stock depleted inventories. Once
inventories are at desired levels in relation to sales, improvements in
demand will level off until business and consumer confidence returns.
Given the large amount of debt in all sectors of the economy, instant
relief is not in the forecast,” said Bisignani.
“Airlines need to make their money in the June-August peak
travel season. Planes are full. Load factors are high. But revenues are
way down. Conserving cash, effectively managing capacity and cutting
costs will be the long-term theme for every business in the air transport
value chain,” said Bisignani.
July 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. In comparison of 2009 to
2008, PLF indicates point differential between the periods compared
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 34.5%, Asia-Pacific 30.0%, North America 18.0%, Middle East
11.3%, Latin America 4.5%, Africa 1.7%
freight traffic market shares by region in terms of FTK are:
Asia-Pacific 43.9%, Europe 26.7%, North America 16.4%, Middle East
10.1%, Latin America 2.1%, Africa 0.9%