Domestic Passenger Markets
Domestic passenger markets grew by 2.0% compared to October 2010. Capacity growth in domestic markets outstripped this rise, showing a 2.4% increase over the previous year. This is in line with the long-term growth trend for domestic markets of 2.0%; however it is well below the 8.0% growth experienced during the post-recession recovery.
- US airlines cut capacity on domestic markets by 1.1%. Weak consumer confidence saw demand decline by 0.9%. US airlines reported the strong load factors of 83.6%.
- India recorded the strongest demand growth (11.0%). This is down on the 17.1% year-to-date growth and well below the 16.6% capacity expansion. Load factors stood at 73.8%.
- Brazilian domestic growth has slowed to 6.4%, below the 15.1% year-to-date growth. Load factors were the weakest at 66.9%.
- Japanese domestic traffic has not yet recovered from the impact of the March earthquake and tsunami. October demand was 10.0% down on previous year levels while capacity had been cut by 8.8%. While the market has regained ground from the initial shock (which saw demand fall by more than a quarter), demand remains 7% below February levels.
- Chinese domestic traffic grew by 8.4% over previous year levels, slightly below the capacity expansion of 8.8%. Load factors stood at 83.1%. This is an increase of 8 percentage point in the utilization levels achieved only three years ago, and has played an important role in improving the profitability of Chinese airlines.
Air Freight (Domestic + International)
The confidence of purchasing managers in the manufacturing sector has fallen to its lowest level since 2009. This loss of confidence appears to have caused shippers to switch some transport needs to slower and cheaper sea options to the detriment of air freight which showed a 4.7% decline in October compared to the previous year.
- Airlines have responded to weaker demand by cutting their freighter fleet. But this has not stopped a steady and substantial five percentage point fall in freight load factors compared to their early 2010 peak owing to capacity entering the market via wide-bodied passenger aircraft.
- Asia-Pacific carriers account for about 40% of global freight markets and while they are the most exposed to the volatility of freight volumes, they are still benefiting from the dominance of trade flows to Asia. In October they posted the highest freight load factor (58.8%), a full 12.3 percentage points above the global average of 46.5%. This is a result of strong outward flows of freight from Asia which dominates the air cargo business.
The Bottom Line
“As we enter the year-end period, we are reminded of the vital role that aviation plays in our globalized world. Families and friends will reunite. Holiday gifts will be exchanged across countries and continents. Valuable tourism dollars will be spent in every corner of the planet. And critical climate change discussions will be held in Durban. Much of this is facilitated by efficient air links that have turned our planet into a global community,” said Tyler.
Tyler urged policy makers to reflect on aviation’s significant social and economic benefits. Aviation supports 33 million jobs. And trillions of dollars of economic activity are supported by air transport’s connectivity. This year more than 2.8 billion people and 46 million tonnes of cargo are expected to be transported by safe and efficient air links.
“The economic prospects for 2012 are uncertain, but the track record of aviation’s ability to act as a catalyst for economic activity is rock-solid. Now is the time for governments to use aviation strategically in their efforts to put economies back on track. Implementing a Single European Sky, delivering NextGen air traffic management in the US and supporting the commercialization of sustainable biofuels for aviation are examples of government action that would generate jobs, improve environmental performance and help secure the industry’s long-term success and economic benefits,” said Tyler.
View October traffic results
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