AFRICAN CARRIERS REPORT 16% GROWTH IN PASSENGER SEAT DEMAND

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By admin October 31, 2010 10:42

AFRICAN CARRIERS REPORT 16% GROWTH IN PASSENGER SEAT DEMAND

African carriers have reported a 16% growth in passenger seat demand in September 2010 over the previous September. This is set against a 10.1% increase in capacity.  As a result, Africa’s airline industry is experiencing growth now 7% higher than the pre-recession levels of early 2008.

The International Air Transport Association (IATA) has announced international traffic results for September. International passenger traffic had a 10.5% year-on-year increase, significantly stronger than the 6.5% rise recorded for August. International freight traffic recorded a 14.8% year-on-year increase, which is significantly weaker than the 19.0% rise recorded in August.

The contrast between the performance of freight and passenger markets provides a mixed picture for industry performance. Seasonally adjusted figures show that compared to the previous month (August), passenger traffic expanded by 2.1% while freight markets contracted by an equal 2.1%.

The rebound in growth in passenger markets during September can be attributed to normal volatility in travel patterns accentuated by special factors such as the effect of Ramadan. Passenger capacity expanded by 7.3%, below the 10.5% growth in volumes, pushing global load factors up to 80%. This is a significant improvement on the 77.7% recorded for September last year.

While freight markets were expected to weaken towards year-end, September’s decline was larger than anticipated. Consumer and business confidence remains weak in many parts of the world. Re-stocking lifted freight markets earlier in the year, but this has not been followed by spending to solidify the economic recovery. Compared to September 2009, freight capacity has increased by 11.9%, below the 14.8% increase volumes, pushing cargo load factors to 52.4%.

“It is good news that the recovery in passenger markets continued in September. But the freight numbers are worrying. Freight activity has fallen 6% since May’s post-crisis peak. What we see in air cargo markets is inevitably reflected in the broader economy,” said Giovanni Bisignani, IATA’s Director General and CEO. As international air cargo accounts for 35% of the value of goods traded internationally, it is a leading indicator of economic activity.

“The industry’s situation is volatile. Passenger traffic represents about three quarters of the industry’s revenues. While September’s passenger growth is reassuring, the accelerating decline of air freight, including in Asia, is an early indicator of some turbulence ahead,” said Bisignani.

“Government actions can impact the sustainability of the recovery. Austerity measures will dampen demand. When combined with new or increased taxation, as we have seen in Germany and the UK, the challenges are even greater,” said Bisignani. “Governments must understand that air transport is an economic catalyst. Last year, we saw that a EUR312 million departure tax in the Netherlands cost the Dutch economy EUR1.2 billion. Further taxing the industry makes no sense when the focus of governments should be on making the recovery sustainable,” said Bisignani.

admin
By admin October 31, 2010 10:42
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