Global air traffic sustains rise in March

MANILA, Philippines - Global air traffic sustained a strengthening of demand in March, according to latest data from the International Air Transport Association (IATA).

IATA, which represents some 230 airlines, including those from the Philippines, comprising 93 percent of scheduled international air traffic, said compared to the same period last year, passenger demand in March was up 10.3 percent, while that of cargo increased 28.1 percent.

Both were also improvements from the nine percent and 26.3 percent growth for passenger and freight demand respecting, recorded in February.

IATA, however, noted that while these are strong gains, the data is being compared to March 2009, which was the low point for international air travel during the recession. 

“March results show that the pace of the upturn is strong. But the trauma of the recession is not over. The industry has lost two years of growth, and passenger and freight markets are still one percent below early 2008 highs. Nonetheless, the pace of improvement, based on an improving global economic situation, is much faster than anybody would have expected even six months ago,” IATA director general and CEO Giovanni Bisignani said.

The International Monetary Fund (IMF) has revised global economic growth forecasts from three percent to 4.3 percent for 2010.

With a 78 percent load factor recorded in March, passenger load factors remain at record highs. While demand expanded 10.3 percent in March, capacity increases stood at two percent, boosting the load factor and creating much tighter supply and demand conditions. Global capacity remained three to four percent below pre-crisis levels.

Meanwhile, international freight markets are also experiencing tighter supply and demand conditions. The 28.1 percent improvement in demand outpaced the 5.3 percent capacity expansion in March. This drove freight load factors to 57.1 percent, the highest since November 2002, when international freight load factors stood at 58.8 percent.

Asia-Pacific carriers posted strong passenger demand growth of 12.6 percent, against a capacity expansion of 1.3 percent. The strength of the rebound in the region’s economies is supporting Asia-Pacific’s demand improvement.

IATA also reported that global air freight is now within a percent of recovering to its previous high point of early 2008. International air freight volumes shrank by over one quarter during the second half of 2008. The upturn in the business inventory cycle has almost eliminated that decline, although the upturn for international air freight has taken twice as long as the collapse.

Both export and import volumes are very strong in the emerging economies of Asia Pacific with a growth of 34.1 percent.

The strong traffic recovery is expected to show a dip in April as a result of the eruption of an Icelandic volcano in April that saw the shutdown of large portions of European airspace over a six-day period. “European carriers were already showing the weakest recovery from the financial crisis through March. The volcanic ash crisis hit the weakest part of the industry the hardest. The majority of the $1.7 billion in lost revenues was by Europe ’s carriers. Passenger confidence is not affected and we expect a quick rebound. The combined impact of lost business and added costs will certainly hit the bottom line,” Bisignani said.