Asia Pacific airlines reported sharpest fall in airfreight in 2011

But don’t worry as this should only be temporary - find out why.

According to the International Air Transport Authority, international air travel rose 6.9% last year, reflecting the strong growth of 6.2% recorded between February and July, compared to 1.2% between September and December. International capacity climbed 8.2%, pushing the passenger load factor down to 77.4%. For December, international traffic climbed 6.4% year over year, in part owing to depressed traffic levels in 2010 in North American and Europe, and rose 1.4% compared to November.

All regions but Africa and Asia Pacific reported growths with the latter experiencing the widest traffic/capacity gap for the year, with annual traffic up 4.1% versus a 6.4% climb in capacity.

“A significant part of this slowdown was due to the earthquake and tsunami in Japan, the impact of which on air travel should be temporary. However, the sharp fall in air freight in the region as Western demand for manufactured goods declined also reduced some business travel for the region’s airlines,” says IATA.

The average load factor was 75.9%. In December, demand climbed 3.7% and capacity rose 5.9% producing a 74.7% load factor.

The impact of last year’s earthquake and tsunami meant Japan’s airlines ended the year with demand down 15.2% on a capacity decline of 11.5%. By December, however, the domestic market had recovered to levels 4.7% below pre-earthquake levels. Even with an 8.7% drop in capacity load factors were the lowest among the group at just 58.8%.

On a positive note, other major carriers in the region reported strong domestic demand.

Chinese domestic demand rose a solid 10.9% for the year on a 7.8% lift in capacity, strengthening load factors to 82.2%, which helped the profitability of the country’s airlines. Economic growth slowed but by most standards still remained strong, underpinning air travel demand. December capacity rose 14% compared to the year-ago period with demand up 12.3%, achieving a 78.7% load factor.

India had the strongest annual growth with demand up 16.4% but capacity rose 18.6% and the load factor was 74.7%. The demand/capacity gap was particularly acute in December, with traffic rising 9.3% on a 15.5% increase in capacity. The deterioration in load factors generated by this excess capacity is one of the factors behind the losses being reported by Indian airlines, in contrast to the current situation in China.