2011 Ends on a Positive Note
- Capacity, Economy Loom as Issues in 2012 -


The International Air Transport Association (IATA) reported that full year 2011 passenger demand rose 5.9% compared to 2010, in line with long-term growth trends. In contrast, cargo markets contracted by 0.7% for the year; but recorded positive demand growth in December of 0.2%. Growth in demand lagged capacity increases at 6.3% (passenger) and 4.1% (cargo) putting downward pressure on load factors. The average passenger load factor for 2011 was 78.1%, down from 78.3% in 2010, while the freight load factor was just 45.9%, down from 48.1% in 2010.

“Given the weak conditions in Western economies the passenger market held up well in 2011. But overall 2011 was a year of contrasts. Healthy passenger growth, primarily in the first half of the year, was offset by a declining cargo market. Optimism in China contrasted with gloom in Europe. Ironically, the weak euro supported business travel demand. But Europe's primarily tax and restrict approach to aviation policy left the continent's carriers with the weakest profitability among the industry's major regions. Cautious improving business confidence is good news. But 2012 is still going to be a tough year,” said Tony Tyler, IATA’s Director General and CEO.

Passenger demand for December rose 5.4% compared to the same month in 2010. But the trend since mid-year has clearly slowed, as travel markets react with a lag to the declines in confidence that weakened cargo in the second half of 2011. Comparisons with December 2010 are also distorted as severe winter weather in Europe and North America as well as strikes in Europe suppressed demand. December 2011 passenger demand was up just 0.7% over November while the load factor declined 0.2 percentage points. Freight capacity climbed 4.4% in December compared to December 2010. The freight load factor was just 46.1% for the month.