IATA: Strong Demand Continues as Recovery Enters Slower Second Phase
Statistics released by the International Air Transport Association (IATA) for the month of July clearly reflect an ongoing recovery in the air transport market. But factors such as fragile consumer confidence and the end of the restocking cycle stand to slow the pace, both in the passenger and cargo sectors, according to IATA director general and CEO Giovanni Bisignani.
Compared with the same month last year, international passenger demand this past July increased 9.2 percent while international scheduled freight traffic showed a 22.7-percent improvement. Although the year-on-year comparisons for July appeared less impressive than the June growth data, which showed 11.6 percent and 26.6 percent increases for passenger and cargo traffic, respectively, IATA attributed the apparent slowdown completely to the fact that by July 2009 traffic had already begun to recover. In fact, after adjusting for seasonality, the improvement in demand for July proved faster than for June.
Still, said IATA, the recovery clearly has entered a slower phase. During last year’s second half, demand rebounded at an annualized rate of 12 percent for passenger traffic and 28 percent for cargo. Up until this July this year, annualized growth rates for passenger traffic had dropped to 8 percent and 17 percent for air freight. Given that the industry traditionally grows at 6 percent a year, the numbers continue to impress, however.
“The recovery in demand has been faster than anticipated,” said Bisignani. “But, as we look toward the end of the year, the pace of the recovery will likely slow. The jobless economic recovery is keeping consumer confidence fragile, particularly in North America and Europe. This is affecting leisure markets and cargo traffic. Following the boost of cargo demand from inventory re-stocking, further growth will be largely determined by consumer spending, which remains weak.”
All told, July global passenger traffic rose to 3 percent above that of pre-crisis levels of 2008, said IATA, while July cargo demand rose 4 percent beyond its pre-crisis levels.