INTERNATIONAL. May, a key indicator month in assessing the state of the aviation business, offers room for cautious optimism, according to a new report from leading sector analysts Air4casts (

The firm noted that May is the first month since January which offers a year-on-year comparison that is “clean and unclouded by special factors” (February added a day in Leap Year; March benefited from an early Easter and April suffered from an Easter in March).

Air4casts said that the latest May data from airports, representing around 20% of the expected passengers for the month, is “encouraging, and for the short-term reassuring even”. It commented: “It now seems, at least for the moment, that the market has plateaued and that the sharp deceleration of recent months has slowed. The same interpretation is open to the US market through its latest airline data. The expectation is that summer travel demand will hold up passably well.

“Travel Agents are not unhappy with booking levels and consumers, under moderate disposable income pressures, are well used to spending pattern adjustments.”

But what will happen in the second half, when many pundits believe the crunch will come after the peak northern hemisphere holiday season is over? Air4Casts said: “Come the Fall [autumn] three forces will coalesce: companies will continue to cut travel spend, consumers being then more sensitive to inflationary pressures will pass on the “˜extra’ trip and airlines will cut uneconomic routes. A fourth force could be a further rise in fuel costs.”

Just over 100 European airports have now declared their May passenger results. Across that base traffic was up +5.2% year-on-year against an expectation of +5.1%. While the base is still too small to allow firm conclusions, Air4casts said that there is now cause to believe that the summer traffic levels will be acceptable.

It continued: “The total May movement across all regions is a positive +3.5% which is precisely the traffic expectation for those airports. The Asia/Pacific sample is small but robust, it said, and shows a +5.3% year-on-year gain for those airports that have so far reported.

US airlines to report (representing 51% of total US traffic) indicated a passenger decrease of -0.4% for the month of May against an expected negative movement of -0.2%. Air4casts said: “It may be that over the summer months elements of stability will emerge to hold pax levels at or around the 2007 level; that could be construed as a bonus and also possibly as a postponement of the effects of capacity reduction which are presently in planning for the Fall.”


In Asia Pacific Air4casts projects a total year-on-year traffic increase next quarter of +4.4% (+4.1% in international traffic). Apart from the troubled US sector, the company believe that while the demand growth curve is flattening, the worldwide market will still see growth. “The total passenger forecast for the next quarter is for year-on-year growth of +3.0%, exactly the same as it was last month. For the full year it is +3.7%; last time round [i.e. one month ago] it was just a tenth of a percentage point higher at +3.8%.”


Each region shows percentage change for Q3 followed by full year.

Africa: +8.9; +10.0
Asia Pacific: +4.4; +5.4
Europe: +3.7; +4.4
Middle East: +9.3; +10.9
Latin America: +5.7; +6.5
North America: -0.1; +0.5
Total passengers: +3.0; +3.7

* Denotes domestic and international. The forecast for international traffic for the next quarter stands at +4.7%. The forecast for domestic travel, which is very considerably influenced by the US, is much lower at +1.4%.

Source: Air4casts

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