IATA Reports Slowdown of Global Air Traffic

The International Air Transport Association (IATA), an industry-wide association of 240 airlines, operating around 84 percent of global air traffic, has reported that global traffic results in May 2012 showed a downward trend, keeping pace with the weakening of global economies.

Although worldwide air traffic increased by 4.5 percent in May 2012, when compared to that in May 2011, this only reflects an increase of 0.1 percent on passenger traffic from April 2012, although capacity has increased by 0.6 percent in May when compared to same period last year.

Freight demand in May 2012 is 1.9 percent below the same period last year, while it is 0.4 percent lower than that in April 2012.

Tony Tyler, the IATA director general and chief executive officer, said, ‘The airline industry is fragile. Relief in oil prices provides some good news. Unfortunately, the softness in oil markets comes on the back of fears of deterioration in the European economy.

Business and consumer confidence are falling. And we are seeing the first signs of that in slowing demand and softer load factors. This does not bode well for industry profitability. Airlines are expected to return a $3 billion profit in 2012 on $631 billion in revenues. That’s a razor-thin 0.5 percent margin.

Whether bringing people together or moving cargo around the globe, aviation is vital to modern life. The G-20 leaders recognised the critical role of aviation which is the backbone of travel and tourism that is a vehicle for job creation, economic growth and development.

Now we need governments to move from recognition to action with tax policies that don’t kill growth, regulation that enables growth and infrastructure to accommodate growth.’