SINGAPORE - The International Air Transport Association (IATA) announced traffic results for April which showed a rebound in international markets with 16.5 percent growth compared to April 2010. While this is exaggerated by the comparison to April 2010 during which European airspace was closed due to the volcanic ash crisis, international travel markets in April had grown to reach a level 7% higher than the pre-recession peak of early 2008.

Asia-Pacific carriers saw 5.1 percent growth in international passenger markets, reversing the 0.6 percent drop in March. Strength in Chinese and Indian markets helped offset the weakness in routes associated with Japan. Japan's international traffic is down 20 percent, knocking a full 1 percent off of total international travel.

Asia-Pacific carriers saw a contraction in the freight market, by 2.5 percent, due to disruptions in the supply chains for autos and electronics in the aftermath of the Japanese earthquake and tsunami.

China's domestic market has seen a decline in growth to 10.8 percent in April. Against a 3.7 percent increase in capacity, load factors were pushed upwards to 84.1 percent. While this is still robust growth in China, the world's second largest domestic market, tighter economic policies have resulted in a significant slowing from the 14.6 percent growth recorded in 2010.

Brazil and India showed the strongest domestic growth at 23.8 percent and 25.6 percent respectively. Both are continuing their trend of high-speed growth.

On 6 June, the International Air Transport Association (IATA) further downgraded its 2011 airline industry profit forecast to $4 billion. This would be a 54 percent fall compared with the $8.6 billion profit forecast in March and a 78 percent drop compared with the $18 billion net profit (revised from $16 billion) recorded in 2010. On expected revenues of $598 billion, a $4 billion profit equates to a 0.7 percent margin.

Asia-Pacific carriers are expected to earn US$2.1 billion-the most profitable of all regions. Even so, this is dramatically down from the US$10 billion profit that the region achieved in 2010. Airlines in this region are more exposed than others to cargo markets and fuel price fluctuations. Asia-Pacific airlines carry 40% of all air freight volumes, while low labor costs and relatively low hedging means fuel accounts for a bigger proportion of total costs. In addition, the Japanese earthquake and tsunami are expected to dent the region's prospects for the remainder of the year. However, this will be more than offset by robust growth in both China and India. The continued dynamism of these economies means that Asia-Pacific is the only region where demand increases (6.4%) are expected to outpace capacity growth (5.9%).