Shaking off a bad previous year, the global airline industry posted an impressive 8.2% growth in passenger traffic in 2010.
At 20.6%, the growth in freight traffic was even more impressive, said Montreal-headquartered International Air Transport Association (IATA) in its annual report Wednesday. "The world is moving again. After the biggest demand decline in the history of aviation in 2009, people started to travel and do business again in 2010,'' said IATA director general and CEO Giovanni Bisignani.
But the IATA boss said the industry was not out of the woods yet because of the tight margins.
"Airlines ended the year slightly ahead of early 2008 volumes, but with a pathetic 2.7% profit margin. The challenge is to turn the demand for mobility into sustainable profits," he added. The growth in demand outstripped capacity increases of 4.4% for passenger and 8.9% for cargo traffic, the report said.
Middle Eastern carriers reported the strongest year-on-year growth of 17.8% thanks to 13.2% increase in seat capacity by Gulf-based airlines in 2010.
North American airlines posted 7.4% growth in passenger traffic, clocking in the highest load factor of 82.2% for the full year among all regions of the world.
While the airlines from the Asia-Pacific region recorded nine% growth, European airlines had to contend with just 5.1% growth in passenger traffic in the year.
The average passenger load factor was up 2.7 points to 78.4% and the freight load factor up 5.2 points 53.8% during the year.
The report said the severe weather in Europe and North America in December dented the industry's recovery, reducing overall traffic demand for the month.
Looking to the future amid rising oil prices, the IATA chief predicted that "2011 would see a consecutive second year of profitability but with industry profits falling by 40% to $9.1 billion.'' Bisignani said his prediction was based on an oil price of $84 per barrel. But oil prices are already hovering around $100 because of the Egyptian crisis.
"For every dollar increase in the average price of a barrel of oil over the year, airlines face the difficult task of recovering an additional $1.6 billion in costs," said the president of IATA that represents 230 airlines. The executive office of Montreal-headquartered IATA is in Geneva.