The International Air Transport Association (IATA) today announced scheduled international traffic for February 2011 showing increases of 2.3 percent for cargo demand compared to February 2010.

February demand was down significantly from the revised 8.7 percent expansion recorded in January for cargo traffic.

The political unrest in the Middle East and North Africa during February is estimated to have cut international traffic by about one percent.

In addition to the political unrest in the Middle East and North Africa, the dramatic fall in cargo growth (from 8.7 percent in January 2011 to 2.3 percent in February) was impacted in part by factory shutdowns due to the Chinese New Year period which fell in the first part of February in 2011.

“Another series of shocks is denting the industry’s recovery from the recession,” said Giovanni Bisignani, IATA’s director general and CEO.

“As the unrest in Egypt and Tunisia spreads across the Middle East and North Africa, demand growth across the region is taking a step back. The tragic earthquake and its aftermath in Japan will most certainly see a further dampening of demand from March.

“The industry fundamentals are good. But extraordinary circumstances have made the first quarter of 2011 very difficult.”

February marked a decline in load factors. Freight load factors have deteriorated 51.6 percent. This is four percentage points below their peak in May 2010, on a seasonally adjusted basis.

Air freight carried by Asia-Pacific carriers fell by 4.5 percent in February. This reflects plant closures associated with Chinese New Year as well as the impact of inflation-fighting measures in the Chinese economy.

In terms of volumes, this had the largest impact in slowing global growth to 2.3 percent, the weakest growth since the beginning of the third quarter in 2009 when annual growth rates turned positive again out of the recession.

Compared to January, freight carried by the region’s carriers fell by 6.6 percent.

On the back of unrest in Egypt and Tunisia, cargo carried by African carriers fell by 5.7 percent. In absolute terms, the freight carried by the region’s carriers fell by 8.4 percent in February compared to January.

“The industry situation is volatile and we are watching higher fuel prices carefully,” Bisignani said.

“Capacity increases ahead of demand are bringing down load factors for both passenger and cargo operations. Demand is still supported by strong economic fundamentals.

“But with looser supply and demand conditions, it will be a challenge for airlines to recover the added costs of fuel. Our pathetic 1.4 percent expected margin for 2011 is under considerable pressure,” he said.

Based on an average oil price of US$96 per barrel, IATA is forecasting fuel to account for 29 percent of average operating costs with a total fuel bill of $166 billion. For every dollar increase in the price of a barrel of oil, the industry must recover an additional $1.6 billion in added costs.

Source: CargonewsAsia.