EUROPE & CIS: Continued growth for cargo, but slower phase: IATA

Results from IATA’s quarterly survey conducted in October show business conditions continued to improve during the third quarter. But while confidence going forward remains generally high, some concerns about 2011 are evident, said IATA. Over 77 per cent of airline respondents reported improved profitability during the last quarter on the back of strong revenues and […]


Results from IATA’s quarterly survey conducted in October show business conditions continued to improve during the third quarter. But while confidence going forward remains generally high, some concerns about 2011 are evident, said IATA. Over 77 per cent of airline respondents reported improved profitability during the last quarter on the back of strong revenues and cost control. The outlook for the 12 months ahead remains positive, although the prospect of only modest economic growth next year is dampening the mood somewhat. In September IATA revised its forecast for 2010 industry profits upwards to US$8.9 billion but issued a more subdued US$5.3 billion outlook for 2011. Both cargo and passenger demand continued to improve during the third quarter of this year and expectations for further improvements in demand over the 12 months ahead are still high but look to be moderating rather than accelerating given the economic outlook and that the restocking activity which stimulated freight traffic has drawn to a close. Three quarters of respondents reported stronger cargo traffic in the last quarter although, as is the case on the passenger side of the business, this is a smaller proportion than seen in the last survey where 83 per cent reported improvement. Air freight volumes bounced back very quickly as world trade recovered post-recession and inventory restocking activity also stimulated freight traffic. Freight tonne kilometer data for July and August showed annualised growth of around 12 per cent which was slower than the 25 per cent seen in the first quarter of this year. The proportion of respondents expecting further improvement in air freight volumes over the 12 months ahead has also fallen – from 74 per cent last survey to 62 per cent. There is also now a small minority of respondents who see volume decreases ahead. With inventories now restocked, freight traffic growth is likely to moderate back towards the single digit world trade growth rates. Nevertheless, at a weighted average level of 73.4, confidence in the outlook for freight volumes is still relatively positive, indicating that the industry is facing a shift to a slower phase of growth over the year ahead rather than any absolute decline, IATA said.