Airlines start to see blue skies

AVIATION           LOGISTICS            RECESSION

Global - Confidence seems to have returned to the global aviation sector, if a recent survey is to be believed.

Confidence has grown markedly among major carriers in Asia, Europe and the Americas, said a survey conducted by the International Air Transport Association (IATA).

The report said CFOs and heads of cargo hopeful that a return to economic growth will continue to give demand for air travel and shipments a leg up, especially if fuel prices remain stable.

"Over 73% of airline CFOs said that profitability over the next 12 months will improve," IATA said. "Almost three quarters of respondents now expect freight volumes to rise over the next year - up from just over half [in the] last survey."

The optimism in the IATA survey is mirrored in the latest traffic figures from the Association of Asia Pacific Airlines (AAPA).

AAPA's member airlines said it carried a total of 10.8 million international passengers in September, matching the numbers carried in the same month last year for the first time in over a year.

International passenger traffic measured in revenue passenger kilometres (PRK) was 0.9% lower in September, but also marked a significant improvement compared to the steep monthly declines recovered over the past year.

International air cargo also continued on the road to recovery, AAPA said. While traffic in September registered 6.5% lower than in 2008 levels, this is the smallest shortfall so far this year. The average AAPA international cargo load factor in September rose by 3.4 percentage points to 68.7% for the month, as carriers cut capacity by 11.2%.

"The September traffic figures offer some encouragement amidst signs of a continuing pickup in consumer confidence and economic activity, led by the Asia Pacific region," said Andrew Herdman, AAPA director general.

Herdman however, warned that airlines are not completely out of the woods. "Shrinking traffic volumes, coupled with lower yields, led to sharply lower revenues and heavy losses for most carriers. Despite capacity cutbacks, and other cost reduction efforts, airlines are still struggling to restore profitability. Meanwhile, rising oil prices are driving up costs, and will act as a brake on the wider economy.

"Overall, as things stand now, the recovery still looks quite fragile," he said.

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