International air cargo traffic grew very slowly in February and the outlook for the rest of 2008remains weaker than last year, according to the latest monthly traffic figures from the
International Air Transport Association (IATA). Meanwhile, the Open Skies deal between Europe andthe USA that entered force on March 30 will boost transatlantic capacity on passenger and cargoflights, and increase competition.In February, international cargo traffic, measured in freight-tonne-kilometres, grew by 5.9%.Traffic over the first two months was up by 5.1%. But the absolute figure for February included theadditional day due to the leap year, IATA said.
“When we adjust for the impact of the leap year, passenger demand increased by 4-5% whilefreight was even more sluggish in the 2-3% range. Demand is still growing. But clearly we are in adifferent league from the 7.4% and 4.3% growth that we saw in 2007 for passenger and freightrespectively. Things are slowing down,” said Giovanni Bisignani, IATA’s Director General and CEO.
Asia, the largest air cargo market, generated growth of just 1.6% in February, and of 3% overthe first two months. Europe, the second-largest market, grew by 7.8% in February and by 6.4% overJanuary-February. North America showed a 12.1% rise in February and a 7.1% increase in the firsttwo months.
IATA has now downgraded its forecast for airline industry profits this year to $4.5 billionbased on world economic growth of 2.6% and an average oil price of $86 per barrel. It originallypredicted $7.8 billion profits for 2008 last autumn but has twice reduced the figure due to thecredit crunch and soaring oil prices.
Meanwhile, the introduction of Open Skies between the EU and USA on March 30 will lead tostronger competition as airlines increase transatlantic flights, IATA pointed out. Theliberalisation comes against the backdrop of a slowing US economy but of rising US exports due tothe weak dollar, while European exports are being impacted by the strong euro.
“US-EU Open Skies will be yet another variable in a very complicated equation,” saidBisignani. “Out of Europe’s busiest international hub – Heathrow – there are 25% more weeklyflights scheduled to serve the US market. Now what we need is the full set of commercial freedomsto be able to serve those opportunities most effectively,” said Bisignani.
Under the EU-US Open Skies agreement signed in April 2007, European airlines can now flywithout restrictions from any point in the EU to any point in the US. In addition, EU cargoairlines can fly between the US and other countries without the flight having to start or finish inthe EU. “This marks the start of a new era in transatlantic aviation. This agreement will bringmore competition and cheaper flights to the US,” said transport commissioner Jacques Barrot.
In May 2008, the European Commission will engage in second-stage negotiations with the US. “Afully Open Aviation Area between the EU and the US must remain our objective,” Barrot added. A keyobjective is to open up the domestic US market for EU airlines.
