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Air travel slows in Nov, freight inches up: IATA

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International air passenger traffic fell by 1.5 percent in November compared with October, although it remained 4.0 percent up on November 2010, the International Air Transport Association (IATA) said on Friday.

In its monthly report on air industry activity, IATA said the international travel market had grown only 0.5 percent since May, although domestic air travel had increased more strongly.

The international passenger market has grown fastest in Latin America, Europe and the Middle East this year. But Europe has slowed sharply, with year-on-year growth of 4.9 percent in November, barely half the 9.5 percent in the year to date.

The global air travel market, including both domestic and international flights, shrank by 0.5 percent from October but remained 4.3 percent up from November 2010, IATA said.

IATA represents 240 airlines comprising 84 percent of global air traffic, including British Airways owner International Airlines Group, Air China, American Airlines (AMR-N) and Deutsche Post DHL.

Domestic air travel in China, India and Australia grew in November, offsetting some of the decline in international travel. China's domestic market has grown 17.2 percent in the past year, partly because of a weak November 2010.

However, there is a strong contrast between the amount of spare capacity available in different domestic markets.

This year's surge in China's domestic traffic outstripped a hefty 13.3-percent rise in capacity, keeping seats filled 80.7 percent of the time in November, which IATA said helped local airlines generate good profits. Chinese carriers include China Southern and China Eastern.

U.S. domestic carriers managed to do even better by keeping planes 83.4 percent full in November, having cut capacity faster than the market could shrink over the past year.

By comparison, India's domestic airline capacity has increased by 17.3 percent in the past year, leaving seats empty despite 10.7-percent market growth.

Indian airlines, which include firms such as Jet Airways and Kingfisher, still managed to fill 76.8 percent of available capacity on domestic flights in November, more than their counterparts in Brazil and Japan, where domestic flights were just over 65 percent full.

Faced with a slowdown in trade, freight carriers have also been cutting capacity, but spare capacity has still increased because of deliveries of new twin-aisle passenger aircraft that have more room for cargo, IATA said.

The increase in spare capacity is undermining cargo profitability, it said. In the first 11 months 2011, 4.1 percent more freight capacity has been available than in the same months of 2010. But the global market has shrunk by 0.7 percent and only 45.9 percent of available space has been filled.

However, in November international air freight traffic inched up 0.5 percent from October, despite remaining 3.8 percent below the level of November 2010.

As in passenger travel, domestic markets for freight are looking healthier than international demand. Domestic freight markets grew 4.4 percent from October, while the global market grew 1.1 percent overall.

But IATA warned against optimism, citing the Purchasing Managers' Index which it said was persisting at levels that indicated contraction.

"A further weakening of air travel and freight markets in the months ahead looks likely," it said.

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