Year-on-year growth in international passenger demand slowed to 3.8 per cent in March from the 5.8 per cent recorded in February, said the director general of the International Air Transport Association (Iata).

“The profile of the recovery in air transport sharply decelerated in March. The global industry lost 2 percentage points of demand as a result of the earthquake and tsunami in Japan and the political unrest in the Mena region,” said Giovanni Bisignani.

Conversely, year-on-year growth in freight markets rebounded to 3.7 per cent in March from the 1.8 per cent recorded in February, he added.

Compared to February, global passenger demand fell by 0.3 per cent in March, while cargo demand expanded by 4.5 per cent.

The disruptions in Mena cut international travel by 0.9 percentage points. Egypt and Tunisia experienced traffic levels 10-25 per cent below normal for March. Military action in Libya virtually stopped civil aviation to, from and within that country.

The impact of the events in Japan on global international traffic was a 1 per cent loss of traffic in March. Looked at regionally, Asia-Pacific carriers saw a traffic loss of over 2 per cent, North American carriers had a 1 per cent drop and Europe’s carriers a 0.5 per cent fall. Japan’s domestic market was the most severely impacted with a 22 per cent fall in demand.

Capacity adjustments lagged behind the sudden drop in demand. Against global demand growth of 3.8 per cent, capacity expanded by 8.6 per cent. The average load factor fell by 3.5 percentage points to 74.6 per cent.

International passenger demand

Middle East carriers saw year-on-year demand growth fall from 8.3 per cent in February to 5.6 per cent in March. Compared to the previous month (February) demand was up by 0.1 per cent while capacity expanded by 0.8 per cent. This pushed the load factor down 0.6 percentage points to 73.2 per cent.

African carriers saw demand fall 7.0 per cent compared to the previous March. This is an improvement from the 9.7 per cent drop recorded in February. Compared to the previous month, the region saw demand expand by 6.5 per cent against an increase in capacity of 6.2 per cent.

Load factors improved by 0.2 percentage points to 62.7 per cent. This is sharply below the industry average of 74.6 per cent.

Europe’s carriers saw demand levels of 5.3 per cent above March 2010, down from the 7.4 per cent year-on-year growth in February.

While North American carriers witnessed a 3.7 per cent year-on-year improvement in demand in March, Asia-Pacific recorded the broadest negative turn of fortunes in March.

Compared to the previous year passenger demand was flat. Compared to February however demand contracted by 2.2 per cent while 0.8 per cent was added to capacity.

This led to a sharp 2.3 percentage point fall in load factors to 74.2 per cent in March.
International Air Freight

Middle East and Latin American carriers reported year-on-year freight demand increases in March of 10.1 per cent and 10.4 per cent respectively. African carriers reported the worst performance for March 2011 with a 2.8 per cent fall in demand compared to March 2010.

From the second half of 2010 until January 2011, international air freight expanded in tandem with the growth in world trade at an annualized rate of about 10 per cent.

This was dented in February 2011 when growth, for a number of factors, fell to 1.8 per cent over the same month in the previous year. The 3.7 per cent year-on-year increase in March reflects more normal trading conditions (outside of Japan and Mena) during the month.

Asia-Pacific carriers, which account for 43 per cent of global freight markets, saw air freight demand contract by 0.6 per cent in March compared to the previous year.

Compared to the previous March, cargo traffic carried by European and North American carriers was up 6.1 per cent and 7.1 per cent respectively.

The second quarter is likely to see continued depressed air travel markets due to the events in Japan and Mena. However, strong underlining economic growth trends should support recovery in both passenger and cargo markets in the second half of 2011.

“The big uncertainty is the price of oil. Even in the $120 a barrel range, it appears that strong economic growth in markets outside of Europe is continuing,” said Bisignani.

“We see this in the strong demand from business for premium travel which maintained 7.7 per cent growth through February. But many leisure travelers are putting off flying because of the impact of high oil prices.”

“The fragility of the situation is demonstrated by the considerably weaker 3.3 per cent year-on-year growth in economy class travel in February. And, despite efficiency gains, the industry’s 1.4 per cent profit margin leaves it vulnerable in the face of volatile markets,” he added. – TradeArabia News Service