IATA monitors January upturn

International Air Transport Association reports January passenger demand for international scheduled air traffic showed continuing improvement, increasing 6.4%. A 1.2% increase in passenger capacity pushed load factors to 75.9%, up from the 72.2% recorded in the same month last year.

Iata says the large increases in year-on-year comparisons reflect a steady improvement from the precipitous fall in demand that characterised the early part of 2009 rather than a dramatic improvement in January.

Compared to December 2009, and adjusting for seasonal variations, passenger demand grew by 0.5%. However, the market has not yet recovered from the losses of 2008 and early 2009. Demand must improve by a further 2% to return to the peak levels of early 2008.

“Airlines have lost two to three years of growth. Demand is moving in the right direction. We can start to see the future with some cautious optimism, but better volumes do not necessarily mean better profits. Passenger yields are still 15% below peak. And we expect 2010 losses to be US$5.6 billion,” said Iata director general and CEO, Giovanni Bisignani.

There are large geographical differences in the improvements. The strongest upturns have been seen in markets where economic recovery from the recession has been strongest that are Asia, Latin America and the Middle East.

Middle Eastern carriers grew throughout the recession. Growth accelerated to 23.6% in January.

Asia-Pacific carriers experienced a 6.5% increase in demand compared to the previous year. Of the improvement in demand seen since the early 2009 low point, 31% has been realized by carriers in the region which is leading the global economic recovery.

Carriers in North America and Europe saw demand increase by 2.1% and 3.1%, respectively. Although both regions have gained 6% from the early 2009 lows, they remain 4-6% below the early 2008 peak levels. This reflects the jobless recovery from the recession in which consumers are focused on paying down debt.

African and Latin American carriers recorded a 6.3% and 11% improvement in January assisted by robust regional economic activity.

Iata still advocates for open skies. It says because of crises, airlines have suffered and having a long tough journey to recovery. Governments should not make it any more difficult by maintaining policies that restrict airlines ability to do business.