“Sword of Damocles” hangs over airlines

But European airlines experienced 5.3% gain in January

In line with the worldwide average for the month of January, European carriers experienced a 5.3% gain in passenger traffic year-on-year, according to figures just released by IATA. But the persisting economic weakness of the region have resulted in a considerable drop from the 9.5% growth recorded in December, despite the attractiveness of the weak euro to tourist traffic and export activity. The average load factor in Europe strengthened to 75.7% on a 2.7% rise in capacity. However, the load factor is among the lowest in the world.
Global traffic results for January show a 5.7% rise in passenger demand (but an 8% decline in air freight) compared to the same month in 2011. The occurrence of Chinese New Year in January, rather than February as in 2011, exaggerated the increase in passenger demand (and the fall in air freight). But stripping this out, IATA says, the underlying trend is stronger passenger growth.
“Airlines face two big risks: rising oil prices and Europe’s sovereign debt crisis. Both are hanging over the industry’s fortunes like the sword of Damocles,” said IATA’s director general and CEO, Tony Tyler.
Asia-Pacific airlines saw their traffic rise 6% in January compared to 2011. Capacity climbed 6.4% and load factor dipped slightly to 77.5%. Year-on-year traffic growth would have been softer were it not for the Chinese New Year boost. Meanwhile, North American airlines had a 0.3% dip in passenger traffic and capacity dropped 0.9%, pushing load factor up fractionally to 77.6%. Next to African carriers, passenger demand in North America was the weakest performance.
IATA.org
[pictured: Finnair A340; courtesy Finnair]

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