March figures for global cargo and passenger traffic from the International Air Transport Association (IATA) point to a lethargic international freight growth of 3.2 per cent, significantly down from the 4.3 per cent growth recorded in the same period of 2007. Compared to the same month in the previous year, passenger demand increased 5.8 per cent with load factors at nearly 78per cent.
IATA also cautioned that the March passenger growth was positively skewed by the Easter holiday period which was in April of the previous year. Adjusting for this distortion, real traffic growth in March was 4 per cent. The slowdown in the demand growth continues the sharp downward trend which began in December 2007 as the impact of the US credit crunch began to be felt in the airline industry.
Worse still, a slowdown in Asia-Pacifi c carrier traffic to a 4.3 per cent growth rate year-on-year appears to point to the fact that the region’s booming economies, which thus far immunised carriers in the region from the US slowdown, no longer provide that key buff er.
International passenger load factors were equally skewed by the Easter period. When adjusted to take into account artificially high utilisation over the Easter period, the March load factor was 76.1 per cent. While still high, this is 1.7 percentage points lower than the 77.8 per cent recorded for the same month in 2007. This fall indicated that the slowing of demand occurred faster than airlines could cut capacity.
"traffic only tells a part of the story," says Giovanni Bisignani, IATA’s director general and chief executive. "Astronomical oil prices are hitting hard. And the buff er of an expanding economy has disappeared.
The fortunes of the industry have taken amajor turn for the worse."
Meanwhile, North American carriers shifted traffic from low-yielding domestic markets, their international traffic grew by 6.3 per cent in March. The impact of the high-valued Euro saw US carriers capitalise on the North Atlantic with a 10 per cent growth in traffic while European carriers’ operations in the same area contracted by 2 per cent. Overall European carrier passenger traffic grew by 3.7 per cent.
Middle East carriers saw a double-digit increase of 15.4 per cent reflecting the expanding economies in the region. But even this is a signifi cant downward step from the 20.4 per cent recorded in 2007.
Latin American carrier traffic continues to recover from the restructuring in 2007, boosted by strong demand for commodities produced in the region. The 19.7 per cent growth experienced is well above the 0.5 per cent recorded for the same period last year.
"In the face of such dramatic shifts in the global economy, consolidation is critical. The proposed consolidation in the US is good news. But it makes no sense that consolidation is limited to domestic partners," Bisignani said.
"This is a global industry that needs to be run like a global business. The US-EU Open Sky Agreement second stage talks that open later this month must deliver a modern approach to ownership rules," he added.