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            january 18, 2020

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LKW Walter

Posidonia 2020

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Traffic continues to slow


Year-on-year international passenger demand grew by 3% in April. Capacity growth of 5% saw load factors fall to 75.4%. This is a 1.5% drop from the 76.9% recorded during the same period last year and the third consecutive monthly year-on-year decline. International cargo demand growth remained sluggish at 3.7%.
April figures contain several distortions. The impact of an early Easter holiday in 2008 will have reduced comparative year-on-year traffic growth by about 2% in April. At the same time the 10% transatlantic capacity increase with the commencement of the US-EU Open Skies is estimated to have boosted global traffic by about 1%. Adjusting for these distortions and leap year, underlying passenger traffic demand increased 4% in April and the three previous months.
“The impact of skyrocketing oil prices and weaker economies has made its way to traffic growth. At this time last year we were talking about 6.7% growth for the first four months of the year. This year it’s 4%. There has been a step change downwards,” said Bisignani.

° Unadjusted traffic figures for April indicate significant differences by region:
°° Europe recorded 1.6% year-on-year growth, down from the 3.7% recorded in March.
°° North American carriers recorded 3.8% demand growth in international passenger traffic as capacity continued to shift to international markets. This was outstripped by capacity expansion of 6.2%. Moreover it is down from the 6.3% year-on-year growth recorded in March.
°° Asia Pacific carriers saw 2.6% growth in demand, down from 4.3% in March as a result of the slowing Japanese economy. Particularly impacted were long-haul routes to North America and Europe.
°° Middle Eastern airlines saw an 11% increase in traffic due to soaring oil revenues, developing tourism and additional airport and airline capacity.
°° Latin American airlines saw a 4% increase. This is down from the 19.7% recorded in March as the impact of the significant industry restructuring in 2007 wears off.
°° Africa continued its free-fall with a 5.6% contraction in traffic and an 8.7% reduction in capacity.

° The sluggish air freight volume growth of 3.7% in April was weaker than the 4.4% average increase recorded during the first quarter reflecting the impact of the economic slowdown.
° The EU-US Open Skies agreement provided a modest boost to US airlines which recorded 6% growth in April due to extra transatlantic capacity.
° Middle Eastern airlines recorded a 15.8% increase in April due to additional capacity and strong trade in the markets they serve.
“Combine slowing growth with skyrocketing oil prices and the industry outlook is grim at best,” said Bisignani, as the world’s aviation leaders begin to gather in Istanbul, Turkey for the IATA Annual General Meeting and World Air Transport Summit.
“In 2007 airlines posted a profit of US$5.6 billion. This was the first profit after six years in which losses totaled more than US$40 billion. To achieve this, we re-engineered the industry,” said Bisignani. “On June 1, the industry will mark a Simplifying the Business milestone, having achieved 100% e-ticketing. It means US$3 billion in cost savings and greater convenience everywhere. But there will barely be time to celebrate. Much more change is needed,” said Bisignani.

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