June Passenger Gains Robust, Cargo Outlook Improving
June traffic figures released last week by the International Air Transport Association show strong growth in passenger demand and what IATA characterizes as “signs of life” in the air freight sector. Passenger traffic grew by 6.6 percent during the month compared with the same period a year earlier, while air freight volumes expanded by 1.2 percent.
Every region of the world covered in the IATA report realized gains in passenger demand, both international and domestic. Showing a 12.1-percent growth in international passenger numbers, Middle Eastern carriers posted the most striking increase in cross-border traffic. Domestically, China showed the most robust gains, recording a 14.6-percent jump in demand. However, in IATA’s estimation, June’s “highlight” proved the positive trend in Europe, where airlines reported a second consecutive month of solid growth (4.8 percent), reflecting an easing in recessionary conditions in the Eurozone and an improvement in business and consumer confidence.
While apparently encouraged by the results, IATA director general Tony Tyler remained circumspect in his assessment of the passenger market.
“The stability in the Eurozone, albeit tentative, is giving a boost to business and consumer confidence,” said Tyler. “And the load factor at 81.7 percent shows that airlines are efficiently meeting increasing demand for travel. “But there are some headwinds. Growth in the BRIC economies, including China, is slowing. And oil prices remain high. The industry is still on track to make $4.00 per passenger this year for a global net profit of $12.7 billion. But there is little margin for error and even a small change in the second half of the year could shift the outlook significantly.”
Meanwhile, Tyler reserved an even more cautious outlook for the cargo sector, where a 1.2-percent year-over-year improvement, while by most standards weak, appeared almost robust compared with 0.1 percent growth realized over the first half of the year. Still, results proved mixed, as freight volumes in the Asia-Pacific and North American markets contracted even while the Middle East saw a 12.7-percent increase.
“It’s too early to tell if June was a positive turning point after 18 months of stagnation. Air freight volumes are at their highest since mid-2011, but that good news needs to be tempered with a dose of reality,” he said. “The global economic environment remains weak, and the basis for the acceleration of air cargo growth in June appears to be fragile.”