IATA reports growth contracting in July

New figures out from the International Air Transport Association (IATA) show that global air passenger and freight traffic growth slowed in July. The only month-on-month growth was displayed in Africa, Chinese domestic traffic and by Middle Eastern carriers in July, all other areas growth fell including the Asia-Pacific region. Overall demand there grew just 0.9% in July, a major contraction compared to the 5.8% increase recorded in the June year-on-year comparison.

“The uncertain economic outlook is having a negative impact on demand for air transport,” said Tony Tyler, IATA director general and CEO.

“The cargo business is 3.2 percent smaller than it was a year ago. And passenger markets — with the exception of Africa, China-domestic and the Middle East — saw demand fall from June to July,” Tyler said. “Overall passenger demand is still up 3.4 percent on the previous July. But the growth trend is clearly slowing. This, along with rising fuel prices, is likely to make it a tough second half of the year.”

The China and Brazil markets however continue to post strong growth. China’s domestic market posted 9% demand growth in July, up from the 7.8 % growth posted during June 2011. Capacity rose by 12.1%, while load factor dipped to 84.1% from 86.5 percent last year.

Global freight demand in July was also lower – down some 3.2% than June last year. A large part of that decline was due to a comparison with a relatively strong July last year, but overall the trend in air freight is weak, in line with subdued world trade growth, according to IATA.

Airlines have responded to slow growth by reducing capacity, which has stabilised load factors at relatively high levels and provided some support for profitability in the face of high fuel prices, IATA said.