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March 4, 2010

IATA's January statistics show further improvement in air transport demand

The International Air Transport Association (IATA) announced this week that its January 2010 statistics for international scheduled air traffic showed continuing improvement. Compared to the previous year, January passenger demand was up 6.4%.

International cargo demand showed a 28.3% improvement with only a 3.7% increase in capacity. This pushed the cargo load factor to 49.6% which is a step-change from the 40.1% recorded in January 2009.

The large increases in year-on-year comparisons reflect a steady improvement from the precipitous fall in demand that characterized the early part of 2009 rather than a dramatic improvement in January. Compared to December 2009, and adjusting for seasonal variations, passenger demand grew by 0.5% while air freight volumes increased by 3.0%.

There are large geographical differences in the improvements. The strongest upturns have been seen in markets where economic recovery from the recession has been strongest - Asia, Latin America and the Middle East.

Compared to the low point in the cycle (December 2008-January 2009), international freight traffic has regained about 28%. This is still 3-4% below the early 2008 peak level.

The sharp improvement in air freight, which accelerated to 3.0% in January compared to December, is being driven by businesses re-stocking depleted inventories. This part of the inventory cycle will not last much longer. Durable air freight growth will require consumers to start buying again and businesses to return to making investments. While these improvements are beginning to be seen in Asia, Europe and North America lag behind.

With an 11.6% improvement in January compared to the previous year, carriers in Europe stand out for their sluggish demand recovery. Freight volumes are only 7% above the December 2008 low and 15% below the cycle peak.