Global air traffic rises 11.7% in May

MANILA, Philippines - International scheduled air passenger traffic rose 11.7 percent in May this year compared to the same period last year while freight demand surged 34.3 percent, latest data from the International Air Transport Association (IATA) showed.

IATA represents about 230 airlines, including those from the Philippines, comprising 93 percent of global air traffic.

“Demand rebounded strongly in May following the impact of the European volcanic ash fiasco in April. Passenger traffic is now one percent above pre-recession levels, while the freight market is six percent bigger,” IATA director general and CEO Giovanni Bisignani said.

A capacity increase of 4.8 percent in May lagged behind the strong upturn in passenger demand. This pushed May’s international passenger load factor to 76 percent or 78.7 percent when adjusted for seasonality, marking the sixth consecutive month with seasonally-adjusted load factors near 79 percent.

IATA noted that matching capacity to demand will become increasingly challenging in the coming months. Aircraft utilization remains five percent below pre-recession levels for single-aisle aircraft and eight percent for longer-range twin-aisle aircraft. The 100 aircraft taken out of storage during May and the 93 new aircraft delivered globally add further capacity pressure.

Similarly, the strong surge in cargo traffic outstripped a capacity increase of 12.3 percent, pushing load factors to a record high 55.7 percent.

Asia-Pacific carriers recorded a 13.2 percent increase in passenger demand in May 2010 over the same month in 2009. Asia-Pacific carriers continue to drive the recovery based on robust economic growth, primarily in China. The region accounts for 26 percent of international passenger traffic.

Meanwhile, air freight growth surged in May to 34.3 percent from the 26 percent recorded in April.

Asia-Pacific airlines, which represent the largest market share of 45 percent, grew 38.7 percent compared to May 2009, on the strength of resurgent regional manufacturing.

IATA pointed out that strong traffic growth is contributing to a strengthening industry bottom line. Airlines are expected to post a $2.5 billion profit in 2010 in a dramatic turnaround from the $9.9-billion loss in 2009. “This is good news, but it is only a 0.5 percent margin. We are still a long way from sustainable profitability,” Bisignani said.

“In the short-term, airlines need to focus our efforts on nurturing the recovery by continuing to match capacity carefully to improving demand conditions. And everybody must control costs. This includes airports, air navigation service providers, global distribution systems and labor. There are no exceptions,” he added.

At its recent annual general meeting, IATA announced Vision 2050, an initiative to build a common vision among industry stakeholders for a sustainable future for air transport. Announcing the vision, Bisignani pointed to four cornerstones of change: a new and sustainable energy source, a regulatory regime that allows airlines to operate as normal businesses, cost-efficient infrastructure that meets the needs of users, and services that exceed customer expectations.