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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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IATA Economicswww.iata.org/economics 2
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
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IATA Economicswww.iata.org/economics 3
Air Transport Market AnalysisSeptember 2011
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
MonthlyRPKs(Billion)
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
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Air Transport Market AnalysisSeptember 2011
Total Market (Domestic + International)
280
330
380
430
480
2006 2007 2008 2009 2010 2011
MonthlyRPKs(Billion)
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%
Africa Asia/Pacific Europe LatinAmerica
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
MonthlyRPKs(Billion)
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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Air Transport Market AnalysisSeptember 2011
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%
Africa Asia/Pacific Europe LatinAmerica
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.
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Air Transport Market AnalysisSeptember 2011
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%
Africa Asia/Pacific Europe LatinAmerica
Middle East No rthAmerica
Industry
%o
fAFTKs
Total Freight Load Factor by RegionSource: IATA
Sep-10 Sep-11
.
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Air Transport Market AnalysisSeptember 2011
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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Air Transport Market AnalysisSeptember 2011
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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