IATA: Air transport markets weaken in November

The International Air Transport Association (IATA) announced global traffic results for November showing a softening in passenger markets while air cargo markets remained weak compared to levels attai

The International Air Transport Association (IATA) announced global traffic results for November showing a softening in passenger markets while air cargo markets remained weak compared to levels attained earlier in the year.

Passenger traffic was 4.3% above November 2010 levels but this is skewed as November 2010 was a particularly weak month. The softening in passenger markets becomes apparent when comparing to the previous month (October 2011). This shows a 0.5% decline on a seasonally-adjusted basis.

Freight markets were 3.1% below November 2010 levels despite a 1.1% increase on October 2011 performance.

โ€œWeak global economic performance is being reflected in air transport markets. Freight markets have contracted some 4% compared to January. Although passenger markets have had some growth relative to the beginning of the year โ€“ about 2%โ€“ the trend has been both soft and volatile. Continuing economic uncertainty will likely mean market shortcomings deepening as we enter 2012,โ€ said Tony Tyler, IATAโ€™s Director General and CEO.

Globally, passenger load factors have fallen sharply to 76.3% from 78.5% in October. This shows that the weakness in passenger demand is outpacing airlinesโ€™ ability to adjust capacity accordingly. Regional differences are sharp. While North American carriers saw a 0.8% decline in travel, carriers in the Middle East experienced a 10.1% increase, followed by 9.0% for Latin American airlines.

International Passenger Markets

International travel markets continue to be weaker than domestic markets. Compared to October, international demand contracted by 1.5% while domestic demand grew by 1.3%.

African carriers reported 2.6% growth in demand. While this is twice the 1.3% capacity expansion, the region still recorded the weakest load factors of 66.2%.

North American airlines saw international demand shrink by 1.2% (compared to November 2010), roughly in line with a 1.0% reduction in capacity. The fourth quarter uptick in the US economy has yet to be reflected in passenger markets.

Latin American and the Middle Eastern carriers recorded the strongest year-on-year growth at 8.8% and 9.8% respectively. For both regions, capacity increases outstripped the growth in demand with Middle Eastern carriers growing their capacity by 10.4% and Latin American carriers by 11.4%. Latin American economies have remained strong with robust trade activity. Middle Eastern airlines have seen a gain in market share on long-haul markets through price competitive products.

European airlines continued to face the weakest market outlook due to the uncertainty in the Euro-zone. Demand grew 4.9% compared to the previous November while capacity increased by 5.3%. This is a steep change from the 6.4% demand growth recorded for October on a capacity increase of 8.1%. Growth in travel has been supported by business travel on the back of export strength in economies such as Germany.

Asia-Pacific airlines reported 2.4% growth in year-on-year demand which is less than half the 5.4% growth in capacity. The regionโ€™s carriers recorded a load factor of 73.3%.

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Linda Hohnholz

Editor in chief for eTurboNews based in the eTN HQ.

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