Global demand surges
The International Air Transport Association (IATA) traffic results for November 2007 stated that year-on-year international passenger demand rose 9.3 per cent, the fastest growth rate recorded in 18 months.
This is higher than the 7.7 per cent growth recorded in October and the 7.5 per cent growth recorded over the first 11 months of 2007.
Average international passenger load factors were 75.4 per cent in November, 1.1 percentage points higher than in November 2006.
Passenger demand results were strong across most regions: Asia Pacific (8.8 per cent), North America (7.6 per cent) and Europe (7.6 per cent) all saw robust growth in November with no sign yet of any weakening in demand as a result of economic uncertainty.
Latin American carriers recorded a 20.1 per cent increase reflecting a strong recovery in traffic share following the impact of industry restructuring during 2006.
Middle East carriers continued four years of double-digit growth with an 18.3 per cent increase.
African carriers’ growth slowed to 5.8 per cent largely due to weaker demand in southern Africa and strong competition in long-haul markets.
Freight growth was sluggish, reflecting strong competition with sea shipping and uncertainty over the economic outlook for 2008. International freight demand growth slowed to 3.5 per cent in November, down from 3.6 per cent in October.
Over the first 11 months of 2007 freight demand grew 3.9 per cent, well below the 4.8 per cent recorded over the same period in 2006.
“It’s a mixed picture,” said Giovanni Bisignani, IATA’s director general and CEO. “The global economy ended 2007 on a surprisingly strong note. The November surge in passenger demand has been critical in combating high oil prices and helping airlines end 2007 with an industry profit of $5.6 billion—the first since 2000. But against a backdrop of robust world trade, sluggish freight growth continued to be a disappointment.”
“We ring in 2008 with a warning bell. Passenger demand growth is expected to fall to 5 per cent. And the expected increase in freight demand growth to 4.3 per cent will only help us recover some of the ground lost against sea shipping. High oil prices and the impact of the credit crunch will see industry profitability slip to $5.0 billion in 2008. Since 2001 efficiency gains have been impressive: 64 per cent improvement in labour productivity, 25 per cent reduction in sales and marketing unit costs and a 16 per cent decrease in non-fuel unit costs. The challenge for 2008 will be much more of the same—efficiency everywhere,” said Bisignani.