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Global Airline Industry

IATA: With fewer planes flying airline demand is up

Andrea Rothman and Steve Rothwell  Mar 31, 2010

Global airline traffic in February jumped 9.5pc from a year earlier as carriers filled planes by keeping long-haul aircraft on the ground more, the International Air Transport Association said.

The number of seats on offer increased by 1.9pc, trailing the rise in demand, as airlines used planes on long- haul routes 8pc less than a year earlier, IATA said today in a statement.

The restraint in capacity allowed carriers to increase the proportion of seats filled to 75.5pc, though the improvement comes at a price when planes aren’t in service.

“The resulting increase in unit costs for long-haul operations may delay the positive impact of stronger demand to the bottom line,” IATA said.

The restricted use of aircraft drives unit costs up because average expenses per passenger per kilometer, which factor in the capital cost of buying aircraft, rise if spread over fewer hours of flying.

European airlines posted the weakest growth in demand, at 4.3pc, because of sluggish economies, unemployment and strikes, said IATA, which represents about 230 carriers.

The industry will lose a collective €2.1bn this year, IATA predicted March 11, cutting in half its previous forecast.

Aer Lingus boosted revenue per passenger in the first quarter by reducing long-haul capacity by about one-third, Andrew Macfarlane, chief financial officer of the carrier, said today in an interview.

Filling seats

“We’re focusing more on yields,” Macfarlane said. “Each time an aircraft flies you are trying to maximize the revenue for that flight.”

IATA said that February 2009, the comparison for the February 2010 figures, marked the bottom of the cycle for international passenger traffic during the global recession.

Demand must improve by an additional 1.4pc to mark a return to pre-crisis levels, the Geneva-based group said.

“We are moving in the right direction,” IATA Chief Executive Officer Giovanni Bisignani said in the statement. “The task ahead is to adjust to two years of lost growth.”

North American airlines had “weak growth” of 4.4pc on international flights, while Asian and Middle Eastern carriers had increased demand of 13.5pc and 25.8pc respectively, the group said.

IATA: With fewer planes flying airline demand is up
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