[070710.EN.AIR] IATA : Air Cargo Soars 34pc, Latin America, Africa Lead Growth

THE Geneva-based International Air Transport Association (IATA) has announced a 34.3 per cent year-on-year increase in global air cargo growth in May and an 11.7 per cent rise in passenger traffic.

"Demand rebounded strongly in May following the impact of the European volcanic ash fiasco in April," said IATA director general Giovanni Bisignani.

The air freight market was six per cent bigger in May than pre-recession levels while passenger traffic was one per cent higher, he said.

The strong surge in cargo traffic outstripped a capacity increase of 12.3 per cent, pushing load factors to a record high of 55.7 per cent. Air freight growth surged in May to 34.3 per cent, up from the 26 per cent posted in April.

Asia-Pacific carriers recorded a 13.2 per cent increase in demand in May 2010 over the same month in 2009. Asia-Pacific carriers continue to drive the recovery based on robust economic growth, primarily in China.

Asia Pacific airlines, which represent the largest market share (45 per cent) grew by 38.7 per cent compared to the previous May on the strength of resurgent regional manufacturing.

North American carriers saw a 10.9 per cent increase in May over the same month last year. Careful matching of capacity to demand has driven the load factor to 82.4 per cent, the highest among all regions, IATA said.

European carriers showed the weakest cargo growth at 21.9 per cent. But the 15 per cent fall in the value of the euro is expected to stimulate outbound traffic with cheaper European exports.

Latin American carriers recorded the fastest growth increase at 60.2 per cent in air cargo in May, supported by the region's strong economic upturn.

Middle East carriers recorded a 17.5 per cent growth in May. The region's carriers continue to post strong growth with connecting traffic through their hubs, although the pace of growth has dropped from the over 20 per cent hikes it posted last year.

African carriers air cargo demand increased 58.2 per cent in May just slightly behind Latin American carriers, the global growth leaders for May. At the same time, the region's load factor was the weakest at 66.5 per cent.

A capacity increase of 4.8 per cent in May lagged behind the strong upturn in passenger demand. This pushed May's international passenger load factor to 76 per cent (78.7 per cent when adjusted for seasonality). This is the sixth consecutive month with seasonally adjusted load factors near 79 per cent.

Matching capacity to demand will become increasingly challenging in the coming months. Aircraft utilisation remains five per cent below pre-recession levels for single-aisle aircraft and eight per cent for longer-range twin-aisle aircraft.

The 100 aircraft taken out of storage during May and 93 the new aircraft delivered globally add further capacity pressure.

Strong traffic growth is contributing to a strengthening industry bottom line. Airlines are expected to post a US$2.5 billion profit in 2010 in a dramatic turnaround from the $9.9 billion lost in 2009.

"This is good news, but it is only a 0.5 per cent margin. We are still a long way from sustainable profitability," said Mr Bisignani.

Source : HKSG, 06.07.10.