Airfreight recovery hit by volcano, another slowdown likely.

June 3, 2010 Edward

The International Air Transport Association (IATA) has announced that passenger demand slumped by 2.4 per cent as a result of massive flight cancellations centered in Europe during the six days in April following the eruptions of an Icelandic volcano, whilst international scheduled cargo traffic, less impacted by the cancellations, saw the pace of its recovery slow to 25.2 per cent growth in April (down from the 28.1 per cent improvement recorded in March).

“The ash crisis knocked back the global recovery – impacting carriers in all regions. Last month, we were within 1% of pre-crisis traffic levels in 2008. In April, that was pushed back to 7%,” said Giovanni Bisignani, IATA’s director general and CEO.

“European carriers bore the worst of the volcano’s impact. Their 11.7% drop in passenger traffic could not have come at a worse time. Europe’s slow recovery from the global financial crisis and its currency crisis are already a huge burden on the profitability of its airlines. The uncoordinated and excessive cancellations and unfairly onerous passenger care requirements rubbed salt into the European industry’s wounds,” said Bisignani.

The April drop in demand in Europe can be attributed to both the flight cancellations (two-thirds of the total decline) and follow-on cancellations due to uncertainty of the availability of air travel (one-third). Early indications for May show a rebound in travel from the disrupted levels in April.

The scale of the ash crisis saw global load factors drop to 76.9% from the 78.0% recorded in March. Freight load factors also dipped to 55.3% from the 57.1% recorded in the previous month. While March traffic was within 1% of pre-crisis levels for both passenger and cargo, this slipped to 7% for passenger and 3% for cargo in April.

International cargo demand

Air freight was also impacted by the ash crisis, although less dramatically than passenger traffic. The global purchasing managers’ index rose to its second highest level ever in April, indicating that the fundamentals of the air freight business were not impacted by the crisis. The industry is, however, nearing the end of the inventory cycle and would expect freight growth to slow down over the rest of the year.

European carriers showed the weakest growth at 8.3%, down from the 11.5% growth recorded in March. Poor economic performance prior to the ash crisis had seen European airlines lagging behind the rebound experienced by other regions.

North American carriers recorded a 23.8% increase. While impressive, this was still below the 29.0% recorded in March.

Asia-Pacific carriers, which make up 46% of international cargo operations, recorded growth of 33.2%, slightly below the 35.4% recorded during March.
Middle Eastern carriers saw their growth rate slow to 25.9% from the 35.5% recorded in March.

Latin American carriers saw the largest increase in cargo demand for the second straight month with a 63.0% increase – an improvement on the 47.9% recorded in March.

African carriers also showed an improvement, from 51.4% in March to 54.6% in April.

Source: T and L News