The International Air Transport Association (IATA) announced international scheduled traffic statistics for May which showed an 11.7% increase in passenger traffic and a 34.3% jump in freight demand compared to May 2009.
“Demand rebounded strongly in May following the impact of the European volcanic ash fiasco in April. Passenger traffic is now 1% above pre-recession levels, while the freight market is 6% bigger,” said Giovanni Bisignani, IATA’s Director General and CEO.
A capacity increase of 4.8% in May lagged behind the strong upturn in passenger demand. This pushed May’s international passenger load factor to 76% (78.7% when adjusted for seasonality). This is the sixth consecutive month with seasonally adjusted load factors near 79%. Matching capacity to demand will become increasingly challenging in the coming months. Aircraft utilization remains 5% below pre-recession levels for single-aisle aircraft and 8% for longer-range twin-aisle aircraft. The 100 aircraft taken out of storage during May and 93 the new aircraft delivered globally add further capacity pressure.
Similarly, the strong surge in cargo traffic outstripped a capacity increase of 12.3%, pushing load factors to a record high of 55.7% (56.3% when adjusted for seasonality).
Strong traffic growth is contributing to a strengthening industry bottom line. Airlines are expected to post a $2.5 billion profit in 2010 in a dramatic turnaround from the $9.9 billion lost in 2009. “This is good news, but it is only a 0.5% margin. We are still a long way from sustainable profitability,” said Bisignani.
“In the short-term, airlines need to focus our efforts on nurturing the recovery by continuing to match capacity carefully to improving demand conditions. And everybody must control costs. This includes airports, air navigation service providers, global distribution systems and labor. There are no exceptions,” said Bisignani.
“Two months ago, the Icelandic volcano made it clear that aviation is vital to the global economy. When the volcano went to sleep, politicians developed amnesia to the lessons-learned. Germany proposed a EUR 1 billion departure tax that will dampen demand instead of stimulating growth. The new UK government is talking about a future without domestic aviation and no capacity growth, without any analysis of the devastation that this would bring to the UK’s economy. And the much anticipated accelerated progress on the EUR 5 billion savings of the Single European Sky has been truncated at incremental change. The traveling public and Europe’s struggling economy deserves much better than this short-sighted policy myopia,” said Bisignani.
