The International Air Transport Association (IATA) announced traffic results for August. While passenger demand was up 4.5% over the previous August, this represents a significant slowing from the 6.0% recorded in July. The decline in freight markets accelerated. The 3.8% contraction in freight markets recorded in August was more than double the pace of July’s 1.8% decline.
“The industry has shifted gears downward. The pace of growth in passenger markets has dipped and the freight business is now shrinking at a faster pace. With business and consumer confidence continuing to slump globally there is not a lot of optimism for improved conditions any time soon,” said Tony Tyler, IATA’s Director General and CEO.
Comparisons of July to August more clearly indicate the slowdown. The total passenger market fell by 1.6% in August compared to July. International markets declined by 1.8%, while already weak domestic markets shrank by 1.0%. The total cargo market fell by 1.3%.
Passenger load factors were high at 81.4%, almost as high as in July. While this is close to historically high levels reflecting the industry’s ability to efficiently allocate capacity, it too showed weakness—falling by 1.3% compared to July.
International passenger demand was up 6.2% in August compared to the previous year. However, when compared to July, demand contracted by 1.8%.
* European airlines achieved the strongest growth in international passenger traffic in August with a 7.9% increase, just slightly below a capacity expansion of 8.2%. Although domestic economies and leisure travel are weak, strong exports have led to increased business travel on international markets. Load factors of 83.9% were at historically high levels. While the August growth was the strongest in the industry, it should be noted that this is below the 10.6% demand expansion reported for the first eight months of the year indicating that markets are softening.
* Middle Eastern carriers recorded the second highest demand growth at 6.7%, behind capacity expansion of 7.6%, leaving load factors down at 76.2%.
* North American carriers reported the weakest performance with growth of just 2.9%, which was partly a result of equally slow growth in capacity. This is a sharp downturn from stronger growth earlier in the year, as reflected in the 5.6% year-to-date demand expansion. The region’s carriers posted the highest load factor at 86.1%.
* Asia-Pacific carriers reported 5.3% demand growth for August, slightly below a 5.6% capacity expansion. This is slightly better than the year-to-date growth of 4.4%, reflecting the recovery in Japanese international travel. Load factors of 78.9% were below the industry average of 81.2%.
* Latin American carriers reported 5.6% growth for August, behind their 7.1% capacity expansion. This is well below the 10.9% demand growth recorded over the first eight months of the year. Load factors stood at 76.9%.
* African carriers reported 5.2% demand growth against a capacity expansion of 6.3%. The continent’s carriers had the lowest load factor at 70.0%.