Robust recovery in 2010; continued growth anticipated in 2011 and 2012: ICAO
ICAO stated airlines of its 190 member states handled 2.5 billion passengers in 2010, a 6.3% year-on-year increase from the depressed levels of 2009. ICAO forecasts traffic worldwide will grow at 4.7% and 4.9% for 2011 and 2012, respectively, based on global economic growth of more than 4% for the next three years.
ICAO, meanwhile, cautioned that oil prices, currently above USD80 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.
Traffic growth of 8% in 2010; 3.7% capacity growth
Passenger traffic (RPKs) increased 8%, outpacing a 3.7% capacity (ASKs) increase, ranging from 13% in the Middle East to 2% in Europe, and resulting in a load factor improvement of 2 to 3 points, depending on the region.
ICAO stated the substantial growth reflects positive economic prospects worldwide, based on a 4% increase in the worldwide real GDP. The improvement in load factors, combined with a 3.6% 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”, according to ICAO.
ICAO noted that 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 regional disparities in 2010.
International traffic boosted by emerging BRIC markets
International traffic increased by 8.8% in 2010, 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) nations where outgoing tourism flourished. The largest percentage growth was registered by the airlines of the Middle East with 21%, followed by those of the Asia Pacific region with growth of 12.9%, Latin America (11.4%) and Africa (10%).
Traffic in the mature markets of North America and Europe grew by 6.2% and 6.7%, respectively. The lower growth figures relate to a larger traffic base and still represent significant increases. Moreover, ICAO noted that Europe is still benefitting from the ability of LCCs to expand their point-to-point markets, due in part to the geographical enlargement of the European Union.
ICAO noted that demand for air travel remained strong and resilient despite the impact of the eruption of the Eyjafjallajokull volcano which partially closed European airspace in Apr-2010. More than 100,000 flights were cancelled, including 80% of the intra-European market, with 9.0 million passengers affected.
Domestic traffic slower than international growth
Domestically, in 2010, markets overall grew by 6.9% over 2009 levels. Growth rates of 1.5%, 3.6% and 4% in North America, the Middle East and Africa, respectively, were offset by rates of 15.1% in the Asia Pacific region, 15.9% in Latin America and 12.2% in Europe.
Asia Pacific volumes benefitted from an increase of around 20% in the domestic Chinese market. In the North American domestic market, which remains the world’s largest domestic market, deceleration of traffic growth confirmed the blurring of traditional lines between LCCs and legacy business models, according to ICAO.
Air cargo recovers in line with sharp rebound in global trade
Cargo traffic (FTKs) increased by a “dramatic” 18.9% in 2010, in line with the sharp rebound in global trade. This represents the largest increase in three decades, after a decline of 11% in 2009. The recovery in terms of volume was led by the carriers of the Asia Pacific region, with an increase of 24.8% while all regions posted double-digit growth, the highest being the Middle East at 34.1%.
Trends of 2010: consolidation and LCC expansion
ICAO noted that, in response to the impact of the recession, several trends in the airline industry were either strengthened or confirmed in 2010. Consolidation accelerated mainly for American and European airlines while the development of new airline business models expanded. LCCs continued their expansion, notably in Asia, where they represent 15% of the passenger traffic market share.
In the Middle East, airlines are taking advantage of the ongoing liberalisation 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.