Passenger Demand Strengthens. Freight at a Turning Point?

• The 10.1% growth in passenger demand in October is slightly below the 10.7% recorded in September, but both months are an improvement over August.

• North American airlines posted a 12.4% demand increase over October 2009. October represented the fastest growth rate for the year. With a capacity increase of 11.9%, the load factor for North American airlines was pushed to 82.5%, the highest among all regions. Compared to pre-recession levels of early 2008, the region’s airlines are carrying 2% more traffic.

• European carriers showed a 9.6% increase over October 2009. This is significantly better than the 8.6% growth reported for September. European airline traffic grew by 1.5% from September to October and is now 4% higher than the pre-recession levels of early 2008.

• Asia-Pacific carriers posted a 7.3% demand increase, ahead of a 5.3% increase in capacity. Volumes remain 1% below pre-crisis levels of early 2008.

• African airlines recorded strong growth (13.3%) compared to October 2009. With a capacity increase of 8.9%, load factors improved to 71.8%.

• Latin American airlines posted a comparatively weaker performance with a 4.9% increase in demand and a 0.7% drop in capacity. The region’s results remain skewed because of the bankruptcy of Mexicana.

• Middle East carriers recorded the strongest growth for the month with an 18.0% increase in demand. This is despite the earlier Ramadan dates, which negatively skewed the numbers with a 1% fall in October traffic as compared to September. The region also had the largest capacity expansion at 13.7% compared to October 2009.

• The 14.4% year-on-year increase in freight traffic for October was marginally weaker than the 15.5% recorded in September. Nonetheless, international freight volumes actually improved slightly from its September level on a seasonally adjusted basis.

• Asia-Pacific airlines reported a 14.9% year-on-year increase in international freight demand, down from the 16.2% recorded in September. October’s growth translates to an impressive 22% annualized growth rate for the region’s carriers, reflecting the strong economic recovery particularly in China and India. With a 44% share of total freight traffic, the growth experienced by Asia-Pacific airlines played a large role in the uptick seen in overall industry freight volumes during October.

• European airlines recorded a 12.1% year-on-year demand increase in October. North American carriers saw a slightly larger improvement of 12.2%. For both regions, October freight volumes represented a 6% improvement on freight volumes carried in December 2009. Relative weakness in the Euro and dollar is helping export activity and boosting freight traffic. Even so, traffic remains 12% below pre-recession levels of early 2008 for European airlines and just 2% higher in North America.