IATA: Demand for air travel, freight improving, but revenues down

IATA: Demand for air travel, freight improving, but revenues downGeneva  - Drops in demand for air travel were slowing in July, the International Air Travel Association reported Thursday, but said the bottom line of many airlines was still being hit hard.

Data showed passenger demand declined 2.9 per cent last month, compared to the same period in 2008. Meanwhile freight demand was down 11.3 per cent.

Both figures were improvement from earlier this year. In the first half, passenger demand dropped 6.8 per cent and freight plunged 19.3 per cent on average, year-on-year.

IATA, which represents the industry, said the results were "positive developments," but they came at the expense of sharply falling yields and revenues.

"Demand may look better, but the bottom line has not improved," Giovanni Bisignani, the IATA chief, said in a statement.

The short-term outlook, he said, was "marked by many uncertainties," including the fluctuating price of oil.

Passenger demand, which picked up steadily over the decade as the global economy grew and air travel became cheaper, has been brought back to about the levels in
2005, owing to the economic downturn.

All regions saw passenger travel decline in July, with Asia- Pacific being hit hardest. The exception to the rule, as usual, was the Middle East region, which posted growth of
13.2 per cent, compared to the same month last year, as its market share increased.

Air freight demand stabilized in the first quarter and improved in the second quarter, IATA said, but added that load factors are still lower than levels seen at the same time last year.

Africa was hit hardest by the drop in freight demand, while other regions also saw declines. Again, the Middle East was the only region to show growth, reporting an increase of 1 per cent in demand.

IATA attributed part of the increase in freight demand to the need to replenish depleted stocks, but said it was concerned the loads would fall again until consumer confidence and the business environment improved.(dpa)