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Aviation News

Stronger demand on Asian routes boosts European air traffic

Jul 07, 2010

STOCKHOLM - Stronger demand on Asian routes boosted air traffic in June, three European airlines said on Wednesday, noting a rise in sales of business class tickets as economies begin to recover from the global downturn.

Air France-KLM, Europe's largest airline, posted a strong rise in unit revenue in the month as growth in both passenger and cargo activity outpaced capacity, which had deliberately been held down during the recession.

Scandinavian airline SAS and Finnish national carrier Finnair also said passenger traffic had risen last month, by 0.4 percent and 12 percent year-on-year, respectively.

All three airlines attributed part of the boost to a recovering market for air travel in Asia, where economic growth has accelerated. SAS and Finnair both said Asian traffic was up 26 percent in June.

"Particularly corporate travel has increased ... The demand comes, above all, from European and Asian markets," Finnair Chief Executive Mika Vehvilainen said.

Franco-Dutch Air France-KLM said passenger traffic rose 4.7 percent and its load factor, which measures how well an airline fills its planes, rose 3.5 points to 83.8 percent.

"In long-haul the rise was especially marked on the Asia, North America and Latin America networks," it said.

Improved yield -- or unit revenues -- reflected both an underlying recovery in demand and efforts to keep a lid on capacity, the group said.

Cargo achieved a 0.8 percent increase in traffic and the load factor rose 2.4 points to 67.7 percent as cargo capacity fell 2.8 percent.


European airlines, already shaky from the global recession, had suffered in April as the eruption of a volcano in Iceland threw up a cloud of ash which grounded flights for nearly a week, costing the industry billions in lost revenue.

Horizons have brightened somewhat since then as business travel picks up from dismal levels and some airlines, such as partly state-owned SAS, have reduced their capacity in an attempt to meet competition from low-cost rivals.

"The market continues to be unpredictable but a recovery has been noted on Asian routes, most U.S. routes and selected European routes, however the uncertainty still remains," SAS said, adding business travel had increased.

SAS said its passenger load factor -- a measure of how successful it was in filling its seats -- rose 3 percentage points year-on-year to 79.7 percent in the month. Finnair's passenger load factor rose 3.2 percentage points.

However, SAS flagged another fall in its key yield measure, down 4.9 percent in June, the latest month for which figures are available, following a 6.6 percent drop in May.

Delta Air Lines, the world's largest airline and a joint-venture partner with Air France on the Atlantic, posted a 4.2 percent increase in June traffic.

Stronger demand on Asian routes boosts European air traffic
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