The seasonal cycle of passenger load factors normally sees a fall in November each year and 2010 is no different. The industry passenger load factor in November was 75.6%.
Stripping out the seasonality shows that the passenger load factor continues in the fairly stable 78-79% range seen for most of 2010. This stability in load factor is a function of the similar rates of capacity addition and traffic increase over the year.
The load factor in November continues to track just above that seen in 2009, but has now fallen just below the 2007 level. Further acceleration in capacity addition could see a declining load factor trend set in.
The faster rate of capacity increase in the cargo business has put a dent in the freight load factor. After tracking 3-4 percentage points higher than 2007 levels in the first half of 2010, the load factor has fallen back.
However, at still about 1.5 percentage points higher than 2007 levels, this is still considered a relatively high level of capacity utilization by historical standards.
With growth in air freight moving into a slower post-restocking phase, freight load factors could come under further downward pressure in months ahead.
Fare and yield data for October shows evidence of continued strength in the revenue environment for airlines going into Q4. October marks the third successive month of the recent uptick for average fares and US airline yields have reached a new high for the year.
Premium traffic (first and business class seats) has been growing at a healthy annualized rate of 7-8% so far in 2010. This has helped improve the traffic mix for airlines, lifting average fares and yields.