Carriers have been notching up some impressive first half traffic figures, albeit that they are flattered by comparisons to a very weak 2003.
Traffic figures for the first half year show a massive improvement on 2003, but are perhaps not as impressive as they first look. A combination of the Iraq War and SARS decimated the 2003 figures, so the latest growth comes with the usual cautions attached. Even so, people are clearly returning to the air and with an economic recovery underway, it is far from doom and gloom. Even a cursory glance at the first half figures, collated from monthly data held by sister online service ATI, shows the extent of the gains.
IATA reckons that international traffic for the first half year was up by 20.4%, outstripping a capacity rise of 13.2%. This "substantially exceeded our expectations"says IATA director general Giovanni Bisignani. He predicts that if current trends continue, the industry could end the year with double-digit international growth, compared with a prediction of 7.5% back in March.
He points out, however, that if the downturn years of 2001-2003 are stripped out, then the figures look less exciting. International traffic is up by 8.4%, while the average load factor at 73% is 1.4 points ahead of 2000 levels.
As may be expected, the Asia-Pacific region, which was at the centre of the SARS epidemic, saw the biggest increases in traffic. The Association of Asia-Pacific Airlines (AAPA) reports preliminary June traffic up by 65.4%, with load factors up by 10 percentage points at 76.6%.
Figures for the second half will be less flattering, but the AAPA points out that June load factors were still up by 2.3 percentage points, despite an 11% increase in capacity.
In the USA, traffic has also returned and the Air Transport Association (ATA), reports traffic growth of 11.7% for the first six months among the majors.However, that is still just a touch below the peak levels of 2000. But low-cost carriers continue to grow aggressively, with traffic up by over 40%at the likes of JetBlue and Frontier Airlines, while some regionals surged even faster.
There is a similar pattern in Europe, where the Association of European Airlines (AEA), representing the mainline sector, has seen traffic increase by 11.3%. This is being driven by long-haul traffic to the Asia-Pacific, showing a massive 23% gain for the half year, and again, this can largely be explained by a rebound from the SARS downturn.
The North Atlantic is also relatively healthy, with a gain of just under 10%, while Europe is showing the weakest growth at 7.2%. As in North America, short-haul growth is being led by the low-cost sector, and the AEA notes that its European figures reflect the fact that the corresponding figures in 2003 were "sluggish".
Allowing for this, and the SARS effect, the association says that European growth is a relatively modest 4%, with the Far East and North America growing by a slightly better 7%.
Even so, the industry figures as a whole give some grounds for optimism. "The industry's traffic performance in recent months is impressive. If airlines can maintain strict control on their costs and capacity, the strong traffic recovery for this year could see the industry break even or better," says Bisignani.
However, with low-cost carriers adding capacity over the summer months, the second half of the year could well be much tougher than the first.
REPORT BY COLIN BAKER IN LONDON
Source: Airline Business
