IATA: Earthquake, Political Unrest Disrupt Air Transport Recovery

 - May 9, 2011, 7:45 AM
Libyan Airlines grounded its A320s and the rest of its fleet in late March as political unrest and military action in Libya virtually halted air travel to, from and within that country. (Photo: Airbus)

The earthquake in Japan and political unrest in the Middle East and North Africa interrupted the global air transport industry’s growth trend during March, as global passenger demand fell by 0.3 percent during the month, compared with February’s figures, according to data released last week by the International Air Transport Association.

IATA’s statistics showed that year-over-year growth had slowed to 3.8 percent from 5.8 percent recorded in February. However, freight markets appeared to largely escape the effects of the geopolitical turmoil, showing a rebound in March growth to 3.7 percent year-over-year, compared with 1.8 percent in February. Between the months of February and March, cargo demand expanded 4.5 percent.

According to IATA, the events in Japan resulted in a 1-percent loss in global international traffic in March. From a regional perspective, Asia-Pacific carriers saw traffic erode by more than 2 percent, North American carriers experienced a 1-percent drop and Europe’s carriers felt a 0.5-percent decline. As expected, Japan’s domestic market experienced the most severe effects, suffering a 22-percent fall in demand.

Meanwhile, the disruptions in Middle East and North Africa cut international travel by 0.9 percentage points. Egypt and Tunisia experienced traffic levels 10- to 25 percent below normal for March. Military action in Libya virtually stopped civil aviation to, from and within that country.

Capacity adjustments lagged behind the sudden drop in demand, added IATA. Against global demand growth of 3.8 percent, capacity expanded by 8.6 percent, resulting a drop in average load factor by 3.5 percentage points, to 74.6 percent.

Although IATA predicted that the events in Japan and the Middle East likely will continue to depress growth this quarter, it said strong underlying economic growth trends should support recovery in both passenger and cargo markets in the second half of 2011.

“The big uncertainty is the price of oil,” said IATA director general Giovanni Bisignani. “Even in the $120 a barrel range, it appears that strong economic growth in markets outside of Europe is continuing. We see this in the strong demand from business for premium travel, which maintained 7.7-percent growth through February. But many leisure travelers are putting off flying because of the impact of high oil prices.”