WASHINGTON – The International Air Transport Association (IATA) announced international scheduled traffic results for June showing passenger demand declining 7.2 percent compared to the same month in the previous year while freight demand was down 16.5 percent. International passenger load factors stood at 75.3 percent, down from 77.6 percent recorded in June 2008.
The 7.2 percent drop in international passenger demand was a slight improvement on the 9.3% fall in May. The capacity adjustment of -4.3 percent did not keep pace with the fall in demand leaving average fares and yields under significant pressure. As a result, June revenue on international markets fell by a shocking 25-30 percent.
Cargo demand remained weak at 16.5 percent below June 2008 levels. This is a moderate improvement, albeit from extremely weak levels, over May, which was 17.4 percent below 2008 levels. There has been some improvement in world trade and, after adjusting for seasonal fluctuations, freight volumes rose 6 percent from the low point recorded in December 2008. However, the utilization of air freight capacity on international routes remained very weak (47.3 percent) in June due to unbalanced trade flows with Asia and some market share loss to ocean transport.
“International passenger demand remains very weak,” said Giovanni Bisignani, IATA’s Director General and CEO. “While it appears that there is stabilization in some markets, this comes at a steep price. Capacity cuts have not kept pace with demand falls. Even with lower fares, the load factor remains 2.3 percent below last year’s levels. Airlines are seeing international revenue falls of up to 30 percent at the start of the busy June-August period when airlines traditionally make their money. The outlook remains bleak,” said Bisignani.
International Passenger Demand
The regional pattern of air travel was very mixed in June:
• Asia-Pacific carriers recorded a 14.5 percent fall in demand in June compared with the same month a year ago, following a 14.3 percent drop in May. Fears about Influenza A(H1N1) have also contributed to delaying any early revival in air transport. Initial estimates suggest the impact of Influenza A(H1N1) took up to 4 percentage points off growth rates for the region’s airlines in June.
• North American airlines reported a relative improvement in June, with demand falling 6.7 percent in June (compared to the 10.9 percent fall in May). The smaller decrease is likely due to discounting. Load factors of 82.6 percent were the highest of any region, but revenue from international markets was down about 29 percent in June, the same as the previous month.
• European carriers saw traffic fall 7.1 percent in June, not as deep as the May decline of 9.4 percent. Load factor for June was 77.3 percent for the region.
• Latin American airlines posted a 4.7 percent fall in passenger demand, significantly better than the 9.2 percent drop in May. There are early indications that the region is starting to recover from the Influenza A(H1N1) crisis, which hit in May. The Mexican carriers reported a 25 percent decline in demand, an improvement from the 40% drop in May. There is still uncertainty around the spread of Influenza A(H1N1) and its affect on travel.
• African carriers struggled in June with a 5.9 percent fall in traffic on international routes. Since many African economies are growing despite the global recession, this drop in demand represents market share loss. Middle Eastern carriers remained the bright spot with strong 12.9 percent growth in demand with a 15.2 percent expansion of capacity. The region’s airlines are growing market share with particularly strong traffic growth on routes to Europe and Asia.
The association says the decline of international passenger demand may be stabilizing.
The association announced international scheduled traffic statistics for May which showed an 11.7% increase in passenger traffic and a 34.3% jump in freight demand compared to May 2009.
Air Cargo Basically Flat
IATA: Good news on volumes, but risks remain