Air traffic up in March, likely to drop in April: Iata

Global passenger demand for air travel has grown for the third consecutive month in March, but the figures for April are likely to suffer due to the six-day flight disruptions caused by volcanic ash from Iceland, the International Air Transport Association (Iata) reported on Wednesday.

Latest figures from the aviation watchdog showed that passenger traffic in March rose by 10.3 per cent, while cargo demand increased by 28.1 per cent compared with the same period in 2009. The March statistics have also surpassed February results by 9 per cent and 26.3 per cent for passenger and freight demand, respectively.

Recent growth, however, are likely to be stunted next month as the havoc caused by the closure of most European airspace from April 15 to 20 left the global airline industry $1.7 billion (Dh6.2bn) lighter.

“European carriers were already showing the weakest recovery from the financial crisis through March. The volcanic ash crisis hit the weakest part of the industry the hardest. The majority of the $1.7bn in lost revenues was by Europe’s carriers,” Giovanni Bisignani, Iata’s director general and CEO said in a statement.

He added that although passenger confidence remains unaffected and is likely to rebound, the combined impact of lost business and added operational costs will definitely hit airline profits in the near-term.

In the first three months of 2010, the global aviation industry – while it may not be out of the woods yet – has shown that it was confidently attempting to maneuver its way out of the slump.

“With a 78.0 per cent load factor recorded in March, passenger load factors remain at record highs. While demand expanded by 10.3 per cent in March, capacity increases stood at 2.0 per cent, boosting the load factor and creating much tighter supply and demand conditions. Global capacity remains 3-4 per cent below pre-crisis levels,” Bisignani said.

Middle East carriers continue to lead the pack

Unfazed by the global economic crisis, airlines in the region soared high as they posted the strongest traffic growth of 25.9 per cent, which Iata attributed to their increasing market share in long-haul operations.

“While economic growth of 5 per cent in the region is supporting some of this increase, a large part is attributed to market share gains on long-haul markets, connecting passengers over Middle Eastern hubs. Load factors of 76.2 per cent were slightly below the global average,” the Iata report said.

Trailing behind were African airlines, which managed to record a passenger demand growth of 13.6 per cent with load factors reaching 67.4 per cent.

Meanwhile, economic recovery in the Asia-Pacific region, particularly in China and India, helped regional carriers post double-digit traffic growth of 12.6 per cent.

North American carriers’ traffic growth was steady at 7.8 per cent, up from the 4.4 per cent recorded in February and load factor was the highest at nearly 82 per cent. However, Iata said “uncertainty over government budget cuts and tax increases is dampening demand for air travel.”

With the effects of the recession still in its midst, European carriers had to settle with a 6 per cent traffic growth and a decline in capacity by 0.8 per cent compared to March 2009. The Iata report mentioned that sluggish domestic economy and high unemployment rate contributed to this lacklustre performance.

Posting the weakest growth were Latin American airlines at only 4.6 per cent, down by more than 45 per cent from the 8.5 per cent passenger traffic demand recorded in February. This was attributed to the 8.8-magnitude earthquake that hit Chile on February 27 and killed over 700 people.

Airlines face steep climb to recovery

In an earlier statement, Iata noted that the six-day airspace closure across Europe struck a massive blow to the global airline industry’s quest for financial recovery. Bisignani described its impact as “devastating”, particularly since the industry lost $9.4bn in 2009 and is expected to lose a further $2.8bn this year.

The global economic crisis has wiped out over two years of global airlines’ collective growth and current passenger and freight demand are still 1 per cent below the 2008 record-highs, says Bisignani.

Despite this, Bisignani expects that the rosy outlook for the global economic condition will help the industry fly high again.