The contrast between the performance of freight and passenger markets provides a mixed picture for industry performance. Seasonally adjusted figures show that, compared to the previous month (August), passenger traffic expanded by 2.1% while freight markets contracted by an equal 2.1%.
The rebound in growth in passenger markets during September can be attributed to normal volatility in travel patterns accentuated by special factors such as the effect of the Ramadan. Passenger capacity expanded by 7.3%, below the 10.5% growth in volumes, pushing global load factors up to 80%. This is a significant improvement on the 77.7% recorded for September last year.
While freight markets were expected to weaken towards year-end, Septembers decline was larger than anticipated. Consumer and business confidence remains weak in many parts of the world. Re-stocking lifted freight markets earlier in the year, but this has not been followed by spending to solidify the economic recovery. Compared to September 2009, freight capacity has increased by 11.9%, below the 14.8% increase volumes, pushing cargo load factors to 52.4%.
It is good news that the recovery in passenger markets continued in September. But the freight numbers are worrying. Freight activity has fallen 6% since Mays post-crisis peak. What we see in air cargo markets is inevitably reflected in the broader economy, said Giovanni Bisignani, IATAs Director General and CEO. As international air cargo accounts for 35% of the value of goods traded internationally, it is a leading indicator of economic activity.International Passenger Traffic
- North American carriers saw their traffic climb back to pre-recession (early 2008) levels during the month with an 11.1% increase in passenger demand compared to the previous September. This outstripped a 7.2% capacity expansion. The region recorded the strongest passenger load factors at 84.1%.
- European carriers met an 8.4% increase in demand over the previous year with a 5.9% increase in capacity. The regions carriers reported an average load factor of 82.6%. The region is now 2% above pre-recession levels.
- Asia-Pacific carriers posted an 8.6% traffic increase over the previous September against a capacity increase of 6.9%. While the region led the recovery with an early surge in demand, growth in 2010 has been largely flat. Traffic in the region remains 2% below the pre-crisis peak of early 2008.
- Middle Eastern carriers led the industry growth with a 23.9% increase compared to 2009. The earlier occurrence of Ramadan dampened demand in August, but boosted Septembers traffic. This outstripped capacity growth of 15.3%. Nonetheless, load factors of 76.8% were below the industrys 80% performance.
- Latin American carriers posted the industrys weakest growth at 6.6% with a 0.5% increase in capacity. The weakness is largely due to the ceasing of all operations by Mexicana.
- African carriers reported a 16% growth in demand over the previous September against a 10.1% increase in capacity. The region is now 7% higher than the pre-recession levels of early 2008.
International Freight Traffic
- September marked the second consecutive month of seasonally adjusted declines in freight demand (-1.0% in August, -2.1% in September). Freight volumes are 6% below their May peak and is equivalent to pre-crisis levels.
- European carriers recorded an 11.1% increase in freight demand compared to the same month in 2009. Although European exports have been helped with the weak Euro, freight demand for European carriers remains 14% below pre-recession levels.
- North American carriers recorded a 13.0% growth in September, down from the 21.2% recorded in August, which leaves the region 1% below pre-recession levels.
- Asia-Pacific carriers recorded a 15.0% increase in freight demand over the previous year, a significant decline from the 22.3% growth recorded in August. This took the regions carriers back to the pre-recession levels of early 2008 and, with their 44.0% market share, contributed the most to the global drop in freight demand.
- Middle East carriers bucked the declining trend with a 24.0% increase over previous-year levels. Even through this is less than the 24.2% recorded in August, when adjusted for seasonality this represents an increase of 1.4% over August levels. Moreover, when compared to pre-recession levels, the regions carriers are carrying a third more traffic than they did prior to the recession.
The industrys situation is volatile. Passenger traffic represents about three quarters of the industrys revenues. While Septembers passenger growth is reassuring, the accelerating decline of air freight, including in Asia, is an early indicator of some turbulence ahead, said Bisignani.
Government actions can impact the sustainability of the recovery. Austerity measures will dampen demand. When combined with new or increased taxation, as we have seen in Germany and the UK, the challenges are even greater, said Bisignani. Governments must understand that air transport is an economic catalyst. Last year, we saw that a EUR312 million departure tax in the Netherlands cost the Dutch economy EUR1.2 billion. Further taxing the industry makes no sense when the focus of governments should be on making the recovery sustainable, said Bisignani.