Air-Traffic Growth Slows, Suggesting Peak Has Passed : IATA

Air-traffic growth slowed for a second month in August, suggesting that a recovery in demand for flights may have peaked, the International Air Transport Association said today.

The gain in passenger traffic eased to 6.4 percent compared with a year earlier, down from 9.5 percent in July and a high of 11.9 percent in June. The figure matches the lowest growth rate this year in January, with the exception of April, when a volcanic ash cloud from Iceland closed European airports.

IATA more than tripled its forecast for full-year airline earnings to $8.9 billion on Sept. 21, citing the strength of a recovery in demand, while cautioning that profit would fall back in 2011 as cuts to state spending sap consumer confidence.

“The rapid improvements that we saw earlier this year are behind us,” IATA Chief Executive Officer Giovanni Bisignani said in today’s statement, predicting “a tougher end to 2010 as government stimulus monies run out.”

Traffic grew fastest in the Middle East in August, rising 12 percent, with Europe expanding 5 percent, North America 5.3 percent and the Asian-Pacific region 6.2 percent, IATA said.

Cargo-traffic growth may have peaked in May, when it increased 34 percent, today’s figures suggest, with August’s advance of almost 20 percent the lowest increase since then.

“The bounce from restocking is over,” Bisignani said. “We do not yet see the strong consumer confidence needed to sustain the expansion with spending.”

Source: Bloomberg