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NEWS                                                   

No: 47

 

Weaker Economic Outlook Puts Drag on Cargo Growth

Passenger demand remains robust

 

(5 December 2007) GENEVA The International Air Transport Association (IATA) released traffic results for October 2007. The highlights are:

 

Passenger Traffic

 

         International passenger traffic for October increased 7.7% over the same month in 2006. This is down slightly from the 8.2% growth recorded in September.

         Average international passenger load factors were 76.5% in October, down from the record levels in the summer but 1.2 percentage points higher than in October 2006.

         Passenger traffic growth for airlines in the Middle East (20.9%) continued its 3-year trend of double-digit growth. In Latin America (19%) demand continued to expand following the impact of industry restructuring in 2006.  African airlines (10.8%) also enjoyed solid growth as they grabbed a larger share of rising demand in the region.  

         For the first 10 months of the year, passenger traffic grew 7.3% indicating that consumer demand for air travel remains robust in most regions even as some parts of the global economy, notably the US, slow. Importantly, the credit crunch has yet to dampen demand.

.

Freight Traffic

         Economic volatility is having a more immediate effect on international air freight demand. It grew 3.6% in October compared to the same month in 2006. But this is down from the 5.0% year-on-year growth recorded in September, and partly reverses the strong pick up of freight growth seen in mid-2007.

         Year-to-date freight demand has risen 4.0%. Leading air freight indicators such as semi conductor shipments and global manufacturing business confidence levels have slowed in recent months. Demand for air freight is still expected to grow, but at a slower pace for the remainder of the year.

         Regional results were varied.

o        Middle East carriers saw freight demand improve slightly to 9.0% in October, largely reflecting increased capacity with new route development.

o        Asia Pacific airlines saw a fall in growth rates, from 7% in September to 5.8% in October, partly due to slower growth in semi-conductor shipments.

o        European carriers grew 2.0% and North America 0.6%. This reflects the strength of competition from other modes of transport and slower US economic growth.

 

The numbers show that the fourth quarter will be challenging.  With weakening confidence levels in manufacturing businesses and slower semi-conductor shipments we have already seen a slowdown in cargo growth from 5.0% in September to 3.6% in October, said Giovanni Bisignani, IATA Director General and CEO. Air cargo is still expanding, but the industry has shifted gears to a slower pace of growth. Passenger demand remains strong, but this is a cyclical industry. The next months will be critical to see if the impact of the credit crunch spreads from cargo to corporate and leisure travel.

 

At the same time as the credit crunch casts a shadow over global economic performance, strikes from France to Japan in the last month are reminders of the need to keep labour on board with efficiency.  Airlines are still on track to show their first profit since 2001 this year. Thats good news. But with US$200 billion in debt and oil soaring to record levels, its no time to loosen the belt or the purse strings. Cost control is more critical than ever in all corners of the business, said Bisignani.

 

View full October traffic results

 

- IATA

 

Notes for editors:

 

         IATA (International Air Transport Association) represents some 240 airlines comprising 94% of scheduled international air traffic.

         Explanation of measurement terms:

o        RPK: Revenue Passenger Kilometres measures actual passenger traffic

o        ASK: Available Seat Kilometres measures available passenger capacity

o        PLF: Passenger Load Factor is % of ASKs used. In comparison of 2007 to 2006, PLF indicates point differential between the periods compared

o        FTK: Freight Tonne Kilometres measures actual freight traffic

o        ATK: Available Tonne Kilometres measures available total capacity (combined passenger and cargo)

         IATA 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.

         International passenger traffic market shares by region in terms of RPK are: Europe 34.0%, Asia Pacific 31.8%, North America 18.8%, Middle East 8.0%, Latin America 3.7%, Africa 3.1%

         International freight traffic market shares by region in terms of FTK are: Asia Pacific 46.1%, Europe 25.9%, North America 17.2%, Middle East 7.4%, Latin America 2.2%, Africa 1.1%