While the volumes of air transport leapt up by double digits last year, airline users shouldn’t go out expecting massive cut-price freight or passenger rates from airlines, according to Chris Zweigenthal, CEO of the Airlines Association of SA (AASA). The aviation industry is still a massively competitive environment, he told FTW, and airlines are continually battling to increase their market shares, and to get a share of the growth taking place. Although Zweigenthal added that, from a passenger perspective, airlines were in a particularly competitive mood, especially in SA – with specials still on the go and yields a bit low – he’s not suggesting that anybody’s taking things as far as paying for you or your cargo to fly with them. Although a lot of planes came out of their aircraft parks as the recovery began to show its sustainability from the end of 2009, there’s been no flood of capacity drowning the market. According to the International Air Transport Association (Iata), 2010 as a whole was a year of strong recovery in the air travel and airfreight markets. For the full year reported passenger traffic increased by an above-trend 8.2% and airfreight was up by an exceptional 20.6%. But, the report added: “Capacity lagged far behind. As a result there was a significant improvement in load factors with the passenger load factor rising by 2.7% to 78.4% for the full year with the freight load factor up by 5.2% points to 53.8%.” And that load factor, is where airlines make their profits, and they are loath to cut their yield by oversupplying space, or by entering into a cut-price battle on passenger or freight rates. And the supply/demand balance is still a major focus for air carriers. Capacity continues to be introduced at a rate quite close to growth in market demand, according to Iata. “In fact,” it said, “passenger capacity shrank by more than demand during December. The yearon- year growth of 5.8% in December was more than the 4.9% growth in traffic but that was due to the comparison with fast traffic growth and slow capacity increases in December last year. Passenger load factors, seasonally adjusted, rose between November and December.” The same was true of airfreight markets, Iata added. Airfreight in December was 34% above its low and, though 5% down on early 2010, was still 1% above the prerecession peak level of early 2008. Also, freight load factors improved during December. The aviation industry is looking at something the same for this year. “Momentum going into 2011 did not appear to be particularly strong,” said Iata. “However, business confidence and other business travel drivers strengthened at the end of last year. “Gains in world trade and a stabilisation of airfreight volumes point to a further upward leg to the expansion of goods shipped by air. Prospects for 2011 still seem to be consistent with air travel and freight markets expanding close to trend growth of 5-6% this year.”
