Robust recovery in 2010 amid changing industry trends - ICAO

MONTRÉAL, 23 December 2010 ─ According to preliminary figures released today by the International Civil Aviation Organization (ICAO), airlines of the 190 ICAO Member States carried approximately 2.5 billion passengers in 2010, up 6.3 per cent over the depressed levels of 2009 caused by the global financial crisis.

The substantial growth in traffic reflects positive economic prospects worldwide, based on a 4 per cent increase in the world real Gross Domestic Product (GDP) as estimated for 2010 by IHS/Global Insight, a major global economic forecasting organization.

Total scheduled passenger traffic (international and domestic), measured in passenger-kilometres performed (PKPs), increased by about 8 per cent year over year.

International traffic

International traffic grew by 8.8 per cent, led by a strong rebound in business and leisure long-haul travel, particularly in emerging markets such as the BRIC (Brazil, Russia, India and China) where outgoing tourism flourished.

The largest percentage growth was registered by the airlines of the Middle East with 21 per cent, followed by those of the Asia/Pacific region with 12.9 per cent, Latin America with 11.4 per cent and Africa with 10 per cent.

Traffic in the mature markets of North America and Europe grew by 6.2 per cent and 6.7 per cent, respectively. The lower growth figures relate to a larger traffic base and still represent significant increases. Moreover, Europe is still benefitting from the ability of low cost carriers (LCCs) to expand their point-to-point markets, due in part to the geographical enlargement of the European Union.

Also, demand for air travel remained strong and resilient despite the impact of the eruption of the Eyjafjallajokull volcano which partially closed the European airspace in the spring, disrupting business and leisure travel and paralyzing air cargo movements. More than 100 000 flights were cancelled, including 80 per cent of the Intra-European market, while 9 million passengers were affected.

Domestic Traffic

Domestically, in 2010, markets overall grew by 6.9 per cent over 2009. Growth rates of 1.5 per cent, 3.6 per cent and 4 per cent in North America, the Middle East and Africa, respectively, were offset by rates of 15.1 per cent in the Asia/Pacific region, 15.9 per cent in Latin America and 12.2 per cent in Europe.

Asia/Pacific volumes benefitted from an increase of around 20 per cent in the domestic Chinese market. In the North American domestic market, still the world’s largest, deceleration of traffic growth confirmed the blurring of traditional lines between LCCs and legacy business models.

Overall, impressive international traffic growth and robust domestic market development in developing countries, coupled with economic growth higher than in developed economies, created a two-speed pattern producing the regional disparities noted.

Capacity

As for capacity offered by airlines, expressed in available seat kilometres (ASKs), it increased globally by 3.7 per cent, ranging from 13 per cent in the Middle East to a low 2 per cent in Europe. Load factors, nevertheless, improved by 2 to 3 points according to regions.

The improvement in load factors, combined with a 3.6 per cent marginal growth in the number of departures relative to the increase in traffic, points to efficient crisis management implemented by the airline industry to ensure a sustainable air transport development from both an economical and environmental point of view.

Air cargo

On the air cargo side, in line with the sharp rebound in global trade, traffic expressed in freight-tonne kilometres performed (FTKPs) posted a dramatic jump of 18.9 per cent, the largest increase in three decades, after a sharp decline of 11 per cent registered in 2009. The recovery in terms of volume was led by the carriers of the Asia/Pacific region, with an increase of 24.8 per cent, while all regions posted double-digit growth, the highest being the Middle East at 34.1 per cent.

Industry trends

In response to the impact of the latest recession, several trends in the airline industry were either strengthened or confirmed. Consolidation accelerated mainly for American and European airlines, enabling them to maintain a competitive position, while the development of new airline business models expanded. LCCs continued their expansion, notably in Asia, where they currently represent 15 per cent of the passenger traffic market share.

In the Middle East, airlines are taking advantage of the ongoing liberalization within the sector to offer a “Value for Money” brand of products, with strategically adapted connections to well-positioned geographical hubs, as well as new and efficient aircraft, combined with attractive aircraft seating and amenities.

Looking ahead

Based on a growth of more than 4 per cent of the world economy for the next three years, ICAO forecasts that traffic worldwide will grow at 4.7 per cent and 4.9 per cent for 2011 and 2012, respectively. Oil prices, currently above USD 80 per barrel, higher than the 2007 average level, remains a potential impediment to growth, although this could be mitigated by the delivery of new and more fuel efficient aircraft.

The world’s two major aircraft manufacturers are expected to have delivered more than 950 new aircraft in 2010, with 40 per cent of them aimed at replacing aircraft in mature markets. These energy-efficient aircraft will contribute to reducing the carbon footprint of aviation on the environment and support efforts towards reversing climate change.

A specialized agency of the United Nations, ICAO was created in 1944 to promote the safe and orderly development of international civil aviation throughout the world. It sets standards and regulations necessary for aviation safety, security, efficiency and regularity, as well as for aviation environmental protection. The Organization serves as the forum for cooperation in all fields of civil aviation among its 190 Contracting States.