Global air traffic growth weakens

Global air traffic growth weakens

The growth in air passenger traffic weakened to just 4.4% in June 2011, according to the latest data from the International Air Transport Association (IATA). Globally, international traffic increased 5.9% year-on-year last month, while the domestic sector saw growth of just 1.9%. IATA said the slowdown reflected sluggish economic growth and increased costs resulting from higher jet fuel prices. European airlines showed the second highest year-on-year growth in demand behind the Latin America region, with the former posting 8.9% rise in passengers and a load factor of 80.6%. IATA said that European travel had been boosted by business travel and a strong inbound trend due to the weak euro. Meanwhile demand in Latin America increased 14.3%, Middle Eastern travel rose 6.4% and North American carriers saw demand grow 4.5%. Asian and African airlines posted the lowest growth at 3.3% and 2.9%. Brazil led domestic travel growth with a 15.1% expansion, followed by India (+14%) and China (+5%). “The industry is living in several different realities. With high load factors and an upward growth trend, the passenger business is doing better than cargo,” said Tony Tyler, director general and CEO at IATA. “What is clear is that the rising jet fuel price is putting pressure on the bottom line. The average price for the second quarter was US$133 per barrel which is an increase of US$10 over the first quarter. With an expected profit margin of only 0.7%, the ability of airlines to recoup this cost is critical to staying in the black for the year.”

Mark Elliott
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Mark Elliott
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