Iata Note Sep11

8/3/2019 Iata Note Sep11

1/8

IATA Economicswww.iata.org/economics 1

AIR TRANSPORT MARKET ANALYSISSEPTEMBER 2011

KEY POINTS

Air travel and air freight markets diverged sharply in September, with air freight pulled lower by deteriorating

economic conditions, but air travel rose strongly.

Worldwide RPKs flown in September were 5.6% higher than a year ago, compared with 4.6% in August. We

were expecting the start of the weaker trend in travel, after the fall in August, but the rebound in September took

RPKs back to trend growth.

Air freight tells a different story. In September worldwide FTKs flown were 2.7% lower than last year. Air freightvolumes had stopped growing for the 12 months to the second quarter. In the third quarter there was a

significant decline in air freight markets, as the chart below shows.

The rise in air travel was broad-based in September, across domestic and international markets. The recovery in

Japans domestic market faltered but there were strong increases in China and India. On international markets

the strongest performances were registered by airlines from Latin America and, despite the Eurozone crisis,

from Europe.

The further decline in air freight was dominated by falls in Europe and Asia-Pacific, reflecting the crisis in many

European economies and knock-on effects of weakness in Western economies for manufacturers in Asia.

Domestic air freight was unchanged. The decline in international air freight reflects a broader deterioration in

international trade.

11

12

13

14

15

16

17

330

351

372

393

414

435

2006 2007 2008 2009 2010 2011

MonthlyFTK(Billions)

MonthlyRPK(Billions)

Total Air Freight and Passenger VolumesSeasonally Adjusted

FTK

RPK

FTK

RPK

FTK

RPK

-15%

-10%

-5%

0%

5%

10%

15%

30

35

40

45

50

55

60

65

2006 2007 2008 2009 2010 2011

%c

hangeoveryear

Indexofbusinessconfidence

Worldwide growth in air travel and business confidence

Growth in RPKs(right scale)

Businessconfidence(left scale)

The outlook for the next few months still looks weak. Air travel has yet to show any such weakness. However,

our analysis still suggests the fall in air freight and the declines in business and consumer confidence are

precursors to a significant slowdown in the growth of air travel.

Year on YearComparison

September 2011 vs. September 2010 YTD 2011 vs. YTD 2010

RPK ASK PLF FTK AFTK FLF RPK ASK PLF FTK AFTK FLF

International 6.6% 7.5% 79.5% -3.0% 2.5% 49.3% 7.5% 8.7% 77.9% 0.4% 6.1% 50.6%

Domestic 3.8% 2.8% 78.8% -0.7% 2.0% 29.8% 4.4% 3.1% 79.3% -1.9% 0.4% 28.0%

Total Market 5.6% 5.8% 79.2% -2.7% 2.4% 45.1% 6.3% 6.6% 78.4% 0.1% 4.8% 45.7%

RPK: Revenue-Passenger-Kilometers; ASK: Available-Seat-Kilometers; PLF: Passenger-Load-Factor; FTK: Freight-Tonne-Kilometers; AFTK:Available Freight Tonne Kilometers; FLF: Freight Load Factor;All Figures are expressed in % change Year on Year except PLF and FLF which are the load factors for the specific month.


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Air Transport Market AnalysisSeptember 2011

COMPARING SEPTEMBER TO AUGUST

September 2011 vs. August 2011

Month onMonth

ComparisonRPK ASK PLF pt FTK AFTK FLF pt

International 2.1% 1.1% 0.7% -1.0% 0.0% -0.5%

Domestic 2.6% 1.0% 1.3% 0.1% 1.1% -0.3%

Total Market 2.7% 1.0% 1.3% -1.5% 0.3% -0.8%

Data are seasonally adjusted.All figures are expressed in % change month on month except, PLF pt and FLFpt which are the percentage point difference between load factors of twoconsecutive months.

The seasonally-adjusted data show a very

strong rebound in RPKs during

September, after the falls seen in August.Capacity was up but at less than half the

pace of demand recovery, allowing a

significant rise in load factors.

Domestic freight was flat in September but

the bulk of air freight takes place on

international market and that was down

significantly. Freight load factors fell.

PASSENGER MARKET

International Market

170

190

210

230

250

270

290

310

330

2006 2007 2008 2009 2010 2011

MonthlyRPKs(Billion)

International Passenger MarketSource: IATA

Actual

Seasonally Adjusted

5.3%5.0%

7.7%

6.4% 6.6%

2.9%

6.0%

5.0%

4.3%

9.2%

10.6%

9.1%

1.2%

6.6%

0%

2%

4%

6%

8%

10%

12%

Africa Asia/Pacific Europe La tin A merica Middle E ast North A merica Industry

%

GrowthinRPKs

International Passenger Growth by RegionSource: IATA

Aug-11 Sep-11

International air travel volumes rebounded to the levels reached in July, following the dip in August. Air travel is

performing remarkably well given the economic uncertainties and decline in confidence. Although the upward

trend remains there does seem to have been a slowdown in its growth. Between May and September RPKs

have been trending upwards at a 4% annualized pace, compared with twice that pace up to early 2011.

The sharp decline in business confidence in most economies, and the weakness of consumer confidence in

Europe and the US, suggest that business and leisure travellers will be much more reluctant to travel.

Confidence has been weakening for some months without any lasting impact on travel. This may reflect the stillrobust conditions in China and other emerging markets. However, a large part of the momentum for air travel to

date will be trips booked earlier in the year, when economic conditions were stronger.

Latin America saw a strong increase which may be supported by more robust economic conditions. European

airlines continue to see unusually robust growth in the traffic they are carrying, despite the worries about

recession spreading in the region. One driver of this growth is the addition of almost 10% capacity over the past

year. Airlines in the Middle East saw a similar increase in traffic over this period, but their capacity additions

have recently slowed to single figure growth, which is a marked change from the 15%+ growth seen in recent

years. North American airlines are adding very little capacity but the weakness of growth in the traffic they

carried in September is likely to reflect weak home markets.

Passenger load factors rose a little in September but remained below earlier highs. Airlines are keeping available

capacity more or less in line with the recent trend in demand. However, rising new aircraft deliveries has led to a

fall in the utilization of twin aisle aircraft as airlines have sought to match supply to demand. The highest load

factors on international markets are being achieved by North American and European airlines, despite the surge


3/8



in new capacity. The largest numbers of new aircraft are being delivered to the Asia-Pacific region and softer

demand recently have led to load factors slipping to the lowest of the major regions.

72%

74%

76%

78%

80%

2006 2007 2008 2009 2010 2011

%o

fASKs

Passager Load Factor on International MarketSeasonally Adjusted

Source: IATA

70.6%

77.4%

82.6%

77.1% 76.8%

84.1%

80.1%

70.5%

76.0%

82.4%

77.1% 77.2%

82.6%

79.5%

60%

65%

70%

75%

80%

85%

90%

Africa Asia/Pacific Europe LatinAmerica

Middle East NorthAmerica

Industry

%A

SKs

International Passenger Load Factor by RegionSource: IATA

Sep-10 Sep-11

Domestic Market

110

120

130

140

150

160

170

180

2006 2007 2008 2009 2010 2011


Domestic Passenger MarketSource: IATA

Actual Seasonally Adjusted

2.0%

10.9%

6.7%

19.6%

-12.3%

-0.3%

2.2%

-1.0%

7.5%9.7%

18.4%

-14.5%

1.6%

3.8%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

Australia Brazil China, P.R. India Japan USA Industry

%

GrowthinRPKs

Domestic Passenger Growth by CountrySource: IATA

Aug-11 Sep-11

Domestic air travel markets rose strongly in September, despite a fall-back in the recovery of Japans market.

Strong growth was experienced in China, the second largest domestic market, and in India. The largest

domestic market, the US, grew modestly in September.

Growth in overall domestic air travel was significantly stronger than new capacity in September. Load factors

rose to a new high in September as a result. Chinese airlines are now achieving the highest domestic load

factors. In the last two years these airlines have improved domestic load factors by 10 percentage points, as a

result of consolidating capacity together with strong growth in demand, which has played an important part in

the shift from loss to profit among major Chinese airlines.

74%

75%

76%

77%

78%

79%

80%

2006 2007 2008 2009 2010 2011

%o

fASKs

Passager Load Factor on Domestic MarketSeasonally Adjusted

Source: IATA

80.8%

72.8%

81.4%

69.9% 69.8%

80.0%78.0%

81.3%

68.3%

82.6%

68.9%68.2%

81.8%

78.8%

45%

50%

55%

60%

65%

70%

75%

80%

85%

Australia Brazil China, P.R. India Japan USA Industry

%A

SKs

Domestic Passenger Load Factor by CountrySource: IATA

Sep-10 Sep-11


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Total Market (Domestic + International)

280

330

380

430

480

2006 2007 2008 2009 2010 2011


Total Passenger MarketSource: IATA

Actual Seasonally Adjusted

3.0%

5.0%

7.3% 7.1%

6.5%

0.9%

4.6%

2.3%

5.1%

9.0%

8.3%

9.0%

1.4%

5.6%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

Africa Asia/Pacific Europe Latin Americ a Middl e East North America Industry

%

GrowthinRPKs

Total Passenger Growth by RegionSource: IATA

Aug-11 Sep-11

Adding international and domestic passenger markets together shows a renewed expansion to a new high in

September. The slow growth in North America, where capacity growth is being restrained, contrasts sharplywith growth in Europe (+9.0%), where capacity has been expanding at an unusually fast pace. Airlines in the

Middle East matched the growth of their counterparts in Europe. Latin American airlines, benefiting from the

regions strong economies, were only a little way behind. Despite the strong growth of the Indian and Chinese

domestic markets, the Asia Pacific airlines experienced only modest growth. This was only partly due to the

continued weakness of the Japanese domestic market, as growth on international markets was also relatively

weak.

73%

74%

75%

76%

77%

78%

79%

80%

2006 2007 2008 2009 2010 2011

%o

fASKs

Passager Load Factor on Total MarketSeasonally Adjusted

Source: IATA

70.9%

77.7%

81.3%

76.1% 76.5%

81.3%

79.3%

70.5%

77.1%

81.3%

73.8%

77.1%

82.0%

79.2%

60%

65%

70%

75%

80%

85%


Middle East NorthAmerica

Industry

%o

fASKs

Total Passenger Load Factor by RegionSource: IATA

Sep-10 Sep-11

FREIGHT MARKET

International Market

8

9

10

11

12

13

14

15

2006 2007 2008 2009 2010 2011


International Freight MarketSource: IATA

Actual

Seasonally Adjusted

2.8%

-5.8%

-1.8%

2.2%

5.3%

-2.3%-2.7%

-2.3%

-6.6%

-2.3%

3.9%4.2%

-0.1%

-3.0%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

Africa Asia/Pacific Europe La tin A merica Middle E ast North A merica Industry

%

GrowthinFTKs

International Freight Growth by RegionSource: IATA

Aug-11 Sep-11


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42%

44%

46%

48%

50%

52%

54%

56%

2006 2007 2008 2009 2010 2011

%

ofAFTKs

Freight Load Factor on International MarketSeasonally Adjusted

Source: IATA

25.0%

63.7%

50.3%

42.3%

46.1%

42.2%

52.1%

24.6%

61.0%

47.4%

42.2% 42.9%

40.4%

49.3%

20%

25%

30%

35%

40%

45%

50%

55%

60%

65%

70%


Middle East No rthAmerica

Industry

%A

FTKs

International Freight Load Factor by RegionSource: IATA

Sep-10 Sep-11

Total Market

10

11

12

13

14

15

16

17

2006 2007 2008 2009 2010 2011

MonthlyFTKs(Billion)

Total Freight MarketSource: IATA

Actual

Seasonally Adjusted

2.0%

-5.5%

-1.9%

3.5%

5.2%

-1.4%

-2.4%-2.5%

-6.3%

-2.4%

4.8%4.2%

0.0%

-2.7%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

A fr ic a A si a/ Pa cif ic E ur ope La ti n A mer ica Mi ddl e E ast N or th A me ri ca I ndus tr y

%

GrowthinFTKs

Total Freight Growth by RegionSource: IATA

Aug-11 Sep-11

Air freight volumes have fallen significantly during the third quarter. By September worldwide FTKs flown were

5% down on the end of the first quarter. This represents a deterioration in trade and economic conditions and

was mirrored by a decline in business confidence. Purchasing managers are once more worrying about

recession in the developed economies. Inventory-expected sales ratios have risen as a result and shipments by

air are being cut.

Asia-Pacific airlines have been particularly hard hit with the FTKs they carry down 6.3% on last year. One of the

weakest trade lanes for air freight has been within Asia, despite the still rapid expansion of many economies.

The slow recovery of Japan from the damage to auto and electronic supply chains caused by the earthquake

and tsunami has been one reason for this. Latin America and the Middle East are the only two regions whose

airlines have seen any growth.

Freight load factors have fallen further in September. Compared to the early 2010 peak load factors are down 6

percentage points as capacity continues to enter the markets, as a result of wide body passenger aircraft, while

demand shrinks. The weakness of demand coupled with falling load factors will be exerting significant downward

pressure on profitability.


6/8



38%

40%

42%

44%

46%

48%

50%

2006 2007 2008 2009 2010 2011

%o

fAFTKs

Freight Load Factor on Total MarketSeasonally Adjusted

Source: IATA

24.6%

59.8%

49.4%

41.3%

45.3%

35.8%

47.5%

24.2%

57.4%

46.3%

41.8%42.4%

34.5%

45.1%

10%

20%

30%

40%

50%

60%

70%


Middle East No rthAmerica

Industry

%o

fAFTKs

Total Freight Load Factor by RegionSource: IATA

Sep-10 Sep-11

.


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ANNEXYear on YearComparison

September 2011 vs. September 2010 YTD 2011 vs. YTD 2010

RPK ASK PLF FTK AFTK FLF RPK ASK PLF FTK AFTK FLF

Africa 5.0% 5.2% 70.5% -2.3% -0.9% 24.6% 2.3% 5.1% 67.1% -2.3% 2.9% 25.7%

Asia/Pacific 4.3% 6.3% 76.0% -6.6% -2.5% 61.0% 4.4% 6.4% 76.5% -4.1% 1.3% 62.3%

Europe 9.2% 9.5% 82.4% -2.3% 3.8% 47.4% 10.3% 11.0% 79.3% 2.8% 7.5% 49.5%

Latin America 10.6% 10.6% 77.1% 3.9% 4.1% 42.2% 10.9% 8.6% 77.7% 5.9% 5.5% 41.5%

Middle East 9.1% 8.5% 77.2% 4.2% 11.9% 42.9% 8.6% 9.4% 75.5% 8.4% 13.7% 44.3%

North America 1.2% 2.9% 82.6% -0.1% 4.3% 40.4% 5.2% 7.4% 81.1% 3.3% 9.0% 40.8%

International 6.6% 7.5% 79.5% -3.0% 2.5% 49.3% 7.5% 8.7% 77.9% 0.4% 6.1% 50.6%

Australia -1.0% -1.5% 81.3% 3.4% 3.6% 78.3%

Brazil 7.5% 14.6% 68.3% 16.1% 11.5% 69.9%

China 9.7% 8.1% 82.6% 10.3% 6.4% 82.7%

India 18.4% 20.1% 68.9% 18.3% 18.8% 74.1%

Japan -14.5% -12.5% 68.2% -17.3% -12.3% 60.1%

US 1.6% -0.7% 81.8% 2.0% 1.4% 83.1%

Domestic 3.8% 2.8% 78.8% -0.7% 2.0% 29.8% 4.4% 3.1% 79.3% -1.9% 0.4% 28.0%

Africa 2.3% 2.9% 70.5% -2.5% -1.1% 24.2% 0.7% 2.8% 67.4% -3.1% 2.1% 25.2%Asia/Pacific 5.1% 5.8% 77.1% -6.3% -2.2% 57.4% 5.5% 5.7% 77.1% -3.9% 0.9% 57.8%Europe 9.0% 9.0% 81.3% -2.4% 3.9% 46.3% 9.6% 10.1% 78.4% 2.6% 7.2% 48.5%

Latin America 8.3% 11.6% 73.8%4.8%

3.5%

41.8% 12.6% 9.6% 75.1% 6.4% 3.8% 40.4%

Middle East 9.0% 8.2% 77.1% 4.2% 11.4% 42.4% 8.1% 8.7% 75.6% 8.4% 13.1% 43.7%North America 1.4% 0.6% 82.0% 0.0% 3.6% 34.5% 3.0% 3.3% 82.3% 1.3% 5.2% 34.1%

Total Market 5.6% 5.8% 79.2% -2.7% 2.4% 45.1% 6.3% 6.6% 78.4% 0.1% 4.8% 45.7%RPK: Revenue-Passenger-Kilometers; ASK: Available-Seat-Kilometers; PLF: Passenger-Load-Factor; FTK: Freight-Tonne-Kilometers; AFTK:Available Freight Tonne Kilometers; FLF: Freight Load Factor;All Figures are expressed in % change Year on Year except PLF and FLF which are the load factors for the specific month.


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Month on MonthComparison

September 2011 vs. August 2011 Market Share

RPK ASK PLF FTK AFTK FLF RPK FTK

Africa 2.4% 0.4% 1.3% -5.2% -2.5% -0.7% 3.3% 1.2%

Asia/Pacific 2.0% 1.2% 0.6% -3.0% -1.1% -1.2% 25.5% 42.8%

Europe 1.6% 1.1% 0.4% -1.1% 1.0% -1.0% 41.9% 24.7%

Latin America 4.1% 3.2% 0.7% 0.1% -0.1% 0.1% 4.3% 3.1%

Middle East 4.1% 1.5% 1.9% -0.1% 0.8% -0.4% 10.9% 11.3%

North America 0.3% 0.5% -0.2% 0.3% 0.8% -0.2% 14.1% 16.8%

International 2.1% 1.1% 0.7% -1.0% 0.0% -0.5% 100.0% 100.0%

Australia -1.0% -1.0% 0.0% 3.4%

Brazil 1.6% 1.5% 0.0% 3.6%

China 3.0% 1.1% 1.5% 19.6%

India 2.3% 1.0% 0.9% 2.8%

Japan -2.4% -0.4% -1.3% 3.3%

US 1.0% 0.1% 0.7% 46.0%

Domestic 2.6% 1.0% 1.3% 0.1% 1.1% -0.3% 100.0%

Africa 2.3% 0.5% 1.2% -4.9% -2.2% -0.7% 2.4% 1.1%

Asia/Pacific 1.3% 0.9% 0.3% -2.1% -0.8% -0.8% 28.4% 40.5%

Europe 1.7% 1.1% 0.5% -2.0% 0.8% -1.4% 30.4% 21.6%

Latin America 3.9% 2.6% 1.0% 0.0% 1.1% -0.4% 5.1% 3.0%

Middle East 3.9% 1.5% 1.8% -1.7% 0.8% -1.1% 7.4% 9.7%

North America 1.3% 0.5% 0.7% 0.4% 0.7% -0.1% 26.3% 24.0%

Total Market 2.7% 1.0% 1.3% -1.5% 0.3% -0.8% 100.0% 100.0%

Data are seasonally adjusted.All figures are expressed in % change month on month except, PLF pt and FLF pt which are the percentage pointdifference between load factors of two consecutive months.

IATA Economics

E-Mail:[email protected]

31ST October 2011

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