Airline Industry Posts Gains In 2011 Amid Weak Economic Conditions (mb.Com - Flight School)

Feb 3
07:30

2012

Ramyasadasivam

Ramyasadasivam

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MANILA, Philippines — Given the weak conditions in Western economies, the global passenger market held up well in 2011 but 2012 is still going to be a tough year, according to International Air Transport Association (IATA).

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In line with long-term growth trends,Airline Industry Posts Gains In 2011 Amid Weak Economic Conditions (mb.Com - Flight School) Articles global passenger demand rose 5.9% in 2011 versus the preceding year although cargo markets shrunk 0.7% for the entire year and only recorded positive demand growth of 0.2% in December, the association reported.

While it ended well, “Overall, 2011 was a year of contrasts,” Director General and CEO Tony Tyler pointed out. “Healthy passenger growth, primarily in the first half of the year, was offset by a declining cargo market. Optimism in China contrasted with gloom in Europe.”

“Ironically, the weak euro supported business travel demand,” he noted. “But Europe's primarily tax and restrict approach to aviation policy left the continent's carriers with the weakest profitability among the industry's major regions. Cautious improving business confidence is good news.”

Growth in 2011 demand lagged capacity increases at 6.3% (passenger) and 4.1% (cargo) putting downward pressure on load factors. The average passenger load factor was 78.1%, down from 78.3% in 2010, while the freight load factor was just 45.9%, down from 48.1% in the comparative period.

Passenger demand for December rose 5.4% compared to the same month in 2010. But the trend since mid-year has clearly slowed, as travel markets react with a lag to the declines in confidence that weakened cargo in the second half of 2011.

Asia-Pacific airlines experienced the widest traffic/capacity gap for the year, with annual traffic up 4.1% versus a 6.4% climb in capacity. A significant part of this slowdown was due to the earthquake and tsunami in Japan, the impact of which on air travel should be temporary.

Comparisons with December 2010 are also distorted as severe winter weather in Europe and North America as well as strikes in Europe suppressed demand.

December 2011 passenger demand was up just 0.7% over November while the load factor declined 0.2 percentage points. Freight capacity climbed 4.4% in December compared to December 2010. The freight load factor was just 46.1% for the month.

International air travel rose 6.9% last year, reflecting the strong growth of 6.2% recorded between February and July, compared to 1.2% between September and December.

International capacity climbed 8.2%, pushing the passenger load factor down to 77.4%.

For December, international traffic climbed 6.4% year over year, in part owing to depressed traffic levels in 2010 in North American and Europe, and rose 1.4% compared to November.