/ 31 December 2010

Africa shows air travel growth as other regions slow

African carriers were the only region to show an increase in air travel growth rates from October (12,6%) to November (16,4%), the International Air Transport Association (IATA) announced on Thursday.

The region’s carriers moved 11% more travellers in November than they did at the pre-recession peak in early 2008.

At the international level, air travel is now 4% above the pre-recession peak of early 2008. All regions, except Africa, reported a slowing in year-on-year growth rates from October to November.

IATA said international scheduled traffic results for November showing 8,2% year-on-year passenger traffic growth and a 5,4% increase for freight.

The passenger load factor for November averaged 75,6%, while the freight load factor stood at 55,2% for the month.

November saw traffic growth slow from the 10% increase recorded in the passenger business and the 14,5% growth in freight in October.

The slowdown in 2010 is partially skewed because of the exceptionally rapid rise in traffic volumes recorded during the fourth quarter of 2009.

However, when viewed in absolute terms, air travel fell by 0,8% and air freight fell by 1,1% between October and November 2010.

This slower growth does not necessarily signal a negative trend. Even with the decline in November, passenger and freight traffic are still expanding at annualised rates of between 5-6%, which is in line with the industry’s historical growth trend.

‘More hard work’
IATA said the industry was shifting gears in the recovery cycle. Growth was slowing towards normal historical levels in the 5%-6% range.

Relative weakness in developed markets was being offset by the momentum of economic expansion in developing markets.

“We see a strong end to 2010 that boosted the year’s profit forecast to $15,1-billion. Slowing traffic growth is in line with our projections for a reduced profit of $9,1-billion in 2011. That’s a 1,5% margin. More hard work will be needed in the New Year to achieve sustainable levels of profitability,” Giovanni Bisignani, IATA’s director general and CEO, said.

IATA also said the air freight recovery hit a peak in May 2010. Compared to that peak, volumes have fallen 7%. The volume of air freight in November was equal to pre-recession levels of early 2008.

November’s year-on-year growth of 5,4% is a significant shift from the 14,5% recorded in October.

This was exaggerated by the exceptionally strong performance in November 2009. In absolute terms, there was a 1,1% fall in freight volumes from October to November.

All regions, except Africa, showed dramatic drops in year-on-year growth rates from October to November.

“The year-end holiday season has been tough for travellers and for airlines. Exceptionally adverse weather conditions in Europe and the US resulted in travel chaos,” the association said, adding that passengers were inconvenienced. Airlines saw lost revenues and saw costs rise.

“As the backlogs of stranded passengers clear and the situation normalises, there are two opportunities that must not be lost. The first is to learn and apply lessons from this difficult season so that all stakeholders in the industry’s infrastructure are better prepared for future exceptional situations,” Bisignani said.

“The second opportunity is to evaluate the regulatory world in which aviation operates,” he said. “In 2010, the Icelandic volcano and the year-end adverse weather made the value of air transport crystal clear.” – I-Net Bridge