Home' Asian Aviation : AAV May 2011 Contents Andrzej Jeziorski
For months now, the industry has been hailing its recovery
from the gloom of the 2009 global recession, but now, once
again, global events are conspiring to cast a shadow on that
At the end of March, the International Air Transport
Association (IATA) announced that scheduled
international passenger and cargo tra c for February
2011 showed year-on-year increases of 6 percent and 2.3
at growth was signi cantly slower than the revised 8.4
percent and 8.7 percent expansion recorded in January for
passenger and cargo tra c respectively.
e industry group says political unrest in the Middle
East and North Africa during February is estimated to
have cut international tra c by about 1 percent. "As such,
it is responsible almost entirely for the slippage in passenger
In addition to the
unrest, the steep
cargo slowdown was
exacerbated in part by
factory shutdowns due
to the Chinese New
Year period, which this year fell in the rst part of February.
"Another series of shocks is denting the industry's recovery
from the recession," says Giovanni Bisignani, IATA's Director
General and CEO. "As the unrest in Eg ypt and Tunisia
spreads across the Middle East and North Africa, demand
growth across the region is taking a step back. e tragic
earthquake and its a ermath in Japan will most certainly see
a further dampening of demand from March. e industry
fundamentals are good. But extraordinary circumstances have
made the rst quarter of 2011 very di cult."
February saw load factors fall on both the cargo and the
passenger sides of the business. Passenger load factors for the
month stood at 73 percent, essentially losing 2.2 percentage
points on a seasonally adjusted basis on peak levels, as airlines
increased capacity faster than demand grew.
Cargo load factors fell even more steeply, to 51.6 percent
-- 4 percentage points below their May 2010 peak, on a
seasonally adjusted basis.
It is worth remembering that air travel volumes for the
month were still 16 percent higher than the trough reached
in early 2009 and some about 5 percent above the pre-
recession peak of early 2008. But even so, looking at IATA's
regional breakdown, the news is not good for Asia.
According to the airline association, Asia-Paci c carriers
reported a major slowdown in passenger demand growth to
3 percent, half of the 6.3 percent seen in January. A capacity
increase of 6.6 percent squeezed the load factor down to
75.4 percent. e early-February timing of the Chinese New
Year pushed some of the holiday tra c into late January.
Air freight carried by Asia-Paci c carriers fell 4.5 percent
in February. is gure was a ected by plant closures for
the Chinese New Year, as well as the economic impact of
in ation- ghting measures in China. In terms of volumes,
this had the largest impact in slowing global growth to 2.3
percent -- the weakest growth seen since the beginning of
the third quarter in 2009 when annual growth rates turned
positive again out of the recession. Compared to January,
freight carried by the region's carriers fell by 6.6 percent.
Figures released in April by the Kuala Lumpur-based
Association of Asia Paci c Airlines (AAPA) show that the
bad news continued into March, with the region's airlines
reporting their rst year-on-year decline in passenger numbers
since October 2009. Asia-Paci c carriers carried 15.5 million
international passengers in March -- a 1 percent decline from
the same month a year earlier, the AAPA reports.
Passenger traffic measured in revenue passenger
kilometres (RPK) fell by 0.8 percent, while capacity
increased 6.3 percent,
resulting in a 5.4
percentage-point drop in
the average international
passenger load factor to
74.8 percent. Freight
tra c (in freight tonne
kilometres), meanwhile, grew 0.4 percent but was outpaced
by capacity growth of 5 percent, leading to a 3.2 percentage
point decline in the average international cargo load factor
to 70.4 percent.
" e March tra c gures to some extent re ect the
consequences of the earthquake in Japan, which led to
signi cant disruptions to normal travel patterns," said
Andrew Herdman, director general of the AAPA. "Japan
generally accounts for about a h of overall tra c in the
Asia-Paci c region, and we saw sharp falls in demand for
travel to, from and within Japan in the weeks following the
Herdman adds that, looking at the rst quarter overall,
passenger tra c in the region still grew 3 percent year-on-
year, with 1 percent growth in freight, following a strong
rebound in 2010.
"Whilst the outlook for continued regional and global
economic growth remains positive, the lingering e ects
from the Japanese earthquake will continue to have an
impact on patterns of travel demand in the second quarter
of the year. More generally, we remain very concerned by
the continued rise in oil prices, which are already pushing
up the cost of travel and threatening to undermine global
Based on an average oil price of US$96 per barrel, IATA
predicts that fuel will account for 29 percent of average
operating costs, with a total fuel bill of US$166 billion.
"For every dollar increase in the price of a barrel of oil,
the industry must recover an additional US$1.6 billion in
added costs," IATA says. n
Cracks appear in recovery
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"Another series of shocks is denting the
industry's recovery from recession."
-- IATA CEO Giovanni Bisignani
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