Domestic Passenger Markets
Domestic markets outperformed international markets in aggregate as strong demand in Brazil, China and India helped to push domestic traffic up 6.1% compared to January 2011.
- The impact of Chinese New Year-related traffic was evidenced in China’s domestic market, which surged 16.8% year over year on a 14.3% lift in capacity, pushing load factor to 80.8%, the highest recorded for domestic traffic. On a seasonally adjusted basis, traffic rose 3.2% compared to December. The Chinese market now accounts for more than 21% of the total global domestic market.
- US January domestic traffic was nearly flat at 0.2%, but capacity contracted 1.5%, pushing load factor to 78.1%.
- Japan’s traffic was 8.9% below previous year levels, slightly more than the 8.3% contraction in capacity. Year to year comparisons are affected by the impact of the March 2011 earthquake and tsunami as well as industry restructuring.
- Brazil’s airlines saw a 10.5% rise in demand while capacity climbed 14.8%. Load factor was 74.9%, down 2.9 points from January 2011.
- India traffic rose 8.8% year over year, while capacity expanded 12.8% and load factor was 74.9%. Demand rose 0.9% compared to December.
Air Freight (Domestic and International)
- The decline in air freight markets ended in the 2011 fourth quarter. The January contraction largely was owing to the Chinese New Year and resulted in international demand falling 8.1% while domestic markets dropped 7%.
- Asia-Pacific and European airlines bore the brunt of the international decline, down 14% and 9.6% respectively compared to January 2011. In addition to the impact of the holiday, the peripheral economies in Europe have been in recession and attracting little inbound freight. Until recently this had been offset by strong outbound traffic flows from Northern European economies.
- Middle Eastern carriers enjoyed a 9.4% rise in demand, the healthiest performance among the regions.North American airlines’ demand dropped 4.0%. Latin American carriers’ traffic climbed 2.2% whileAfrican carriers saw a 3.7% decline compared to the year-ago period.
The Bottom Line
“Running an airline in today’s uncertain economic climate is a tough job. Some well-known names—Spanair and Malev—disappeared in January. At the same time, we know that demand for air travel will grow as the global economy recovers and requires even greater connectivity. The billions of dollars in commercial orders placed at the recent Singapore Airshow demonstrate that airlines are strategically investing to meet that demand with ever-more fuel efficient and environmentally-sustainable aircraft,” said Tyler.
“The aviation industry is a catalyst for economic growth. Governments should keep this in mind in their policy initiatives. Measures to boost competitiveness—not taxes or restrictions—are immediately needed, along with a long-term vision to support sustainable economic growth through much needed infrastructure investments. This includes the Single European Sky, the Federal Aviation Administration’s NextGen, Seamless Asian Skies and airport development. Of course, this must be accompanied with polices to improve environmental performance—the commercialization of sustainable biofuels and a global framework for economic measures to manage aviation’s emissions through the International Civil Aviation Organization included. Such a holistic policy approach will keep communities sustainably connected to global economic opportunities,” said Tyler.