Press Release No.:
29 May 2008
Traffic Continues to Slow - Falling Load Factors Hurt Profitability
29 May 2008 - Istanbul - The International Air Transport Association (IATA) released international traffic data for April.
Year-on-year international passenger demand grew by 3% in April. Capacity growth of 5% saw load factors fall to 75.4%. This is a 1.5% drop from the 76.9% recorded during the same period last year and the third consecutive monthly year-on-year decline. International cargo demand growth remained sluggish at 3.7%.
April figures contain several distortions. The impact of an early Easter holiday in 2008 will have reduced comparative year-on-year traffic growth by about 2% in April. At the same time the 10% transatlantic capacity increase with the commencement of the US-EU Open Skies is estimated to have boosted global traffic by about 1%. Adjusting for these distortions and leap year, underlying passenger traffic demand increased 4% in April and the three previous months.
“The impact of skyrocketing oil prices and weaker economies has made its way to traffic growth. At this time last year we were talking about 6.7% growth for the first four months of the year. This year it’s 4%. There has been a step change downwards,” said Bisignani.
- Unadjusted traffic figures for April indicate significant differences by region:
- Europe recorded 1.6% year-on-year growth, down from the 3.7% recorded in March.
- North American carriers recorded 3.8% demand growth in international passenger traffic as capacity continued to shift to international markets. This was outstripped by capacity expansion of 6.2%. Moreover it is down from the 6.3% year-on-year growth recorded in March.
- Asia Pacific carriers saw 2.6% growth in demand, down from 4.3% in March as a result of the slowing Japanese economy. Particularly impacted were long-haul routes to North America and Europe.
- Middle Eastern airlines saw an 11% increase in traffic due to soaring oil revenues, developing tourism and additional airport and airline capacity.
- Latin American airlines saw a 4% increase. This is down from the 19.7% recorded in March as the impact of the significant industry restructuring in 2007 wears off.
- Africa continued its free-fall with a 5.6% contraction in traffic and an 8.7% reduction in capacity.
- The sluggish air freight volume growth of 3.7% in April was weaker than the 4.4% average increase recorded during the first quarter reflecting the impact of the economic slowdown.
- The EU-US Open Skies agreement provided a modest boost to US airlines which recorded 6% growth in April due to extra transatlantic capacity.
- Middle Eastern airlines recorded a 15.8% increase in April due to additional capacity and strong trade in the markets they serve.
“Combine slowing growth with skyrocketing oil prices and the industry outlook is grim at best,” said Bisignani, as the world’s aviation leaders begin to gather in Istanbul, Turkey for the IATA Annual General Meeting and World Air Transport Summit.
“In 2007 airlines posted a profit of US$5.6 billion. This was the first profit after six years in which losses totaled more than US$40 billion. To achieve this, we re-engineered the industry,” said Bisignani. “On June 1, the industry will mark a Simplifying the Business milestone, having achieved 100% e-ticketing. It means US$3 billion in cost savings and greater convenience everywhere. But there will barely be time to celebrate. Much more change is needed,” said Bisignani.
The IATA Annual General Meeting and World Air Transport Summit is the biggest airline event of the year. Over 700 top industry leaders are expected to attend the event from 1-3 June. Media information can be found at www.iata.org/agm/2008.
View full April traffic results (pdf)
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Notes for Editors:
- IATA (International Air Transport Association) represents some 230 airlines comprising 93% of scheduled international air traffic.
- Explanation of measurement terms:
- RPK: Revenue Passenger Kilometres measures actual passenger traffic
- ASK: Available Seat Kilometres measures available passenger capacity
- PLF: Passenger Load Factor is % of ASKs used. In comparison of 2008 to 2007, PLF indicates point differential between the periods compared
- FTK: Freight Tonne Kilometres measures actual freight traffic
- ATK: Available Tonne Kilometres measures available total capacity (combined passenger and cargo)
- IATA statistics cover international scheduled air traffic; domestic traffic is not included.
- All figures are provisional and represent total reporting at time of publication plus estimates for missing data.
- The passenger load factor for April 2007 was originally reported as 76.3. This has been revised to 76.9. Comparisons with April 2007 in this release are based on this revised figure.
- International passenger traffic market shares by region in terms of RPK are: Europe 33.1%, Asia Pacific 32.9%, North America 18.8%, Middle East 8.5%, Latin America 4.6%, Africa 2.1%
- International freight traffic market shares by region in terms of FTK are: Asia Pacific 46.1%, Europe 25.9%, North America 17.2%, Middle East 7.4%, Latin America 2.2%, Africa 1.1%