July - IATA

AIR TRANSPORT MARKET ANALYSIS
JULY 2011
KEY POINTS
Despite an increasingly gloomy economic outlook, air travel continued to expand at a pace close to trend in July,
to a level 5.9% higher than a year earlier. However, air freight markets stagnated as world trade stopped
growing. Air freight volumes were 0.4% lower than a year ago in July;
International markets remain stronger on average than domestic air transport markets. Air travel expanded by
7.3% in July on international markets, compared to growth of just 3.5% on domestic markets. The stagnation of
air freight is apparent on both international and domestic markets;
Performance continues to differ across international markets. One of the weakest regions was the Asia-Pacific,
largely due to the situation in Japan. North American airlines also saw relatively weak growth in July. The
strongest region continues to be Latin America, where airlines continue to see double figure growth. Despite the
crisis in some European economies, airlines from the region have experienced one of the strongest expansions.
Domestic air travel markets show the biggest differences. Japan’s domestic market is recovering slowly from the
shock of the March earthquake and tsunami, but remained 16% lower than in February. China’s market
continued to go through a softer expansion phase, slowed by the impact of economic policies aimed at
restraining inflation. By contrast the domestic markets in India and Brazil continue to expand fast, up 20.6% and
17.8% respectively in July.
Monthly RPK (Billions)
430
410
390
370
350
RPK
Total Air Freight and Passenger Volumes
Seasonally Adjusted
FTK
17
16
15
14
13
12
Monthly FTK (Billions)
Index of business confidence
65
60
55
50
45
40
35
Worldwide growth in air travel and business confidence
Growth in RPKs
(right scale)
Business
confidence
(left scale)
15%
10%
5%
0%
-5%
-10%
% change over year
330
2006 2007 2008 2009 2010 2011
11
30
2006 2007 2008 2009 2010 2011
-15%
Our analysis suggests the expansion of air travel in Q2 and the start of Q3 was propelled by stronger economic
growth and confidence at the start of the year. The recent fall in business and consumer confidence, the
stagnation of international trade, and the still high level of the jet kerosene price, removes a lot of the positive
support for air travel growth. We would expect to see air travel growth slowing in the next few months. Now that
international trade has stopped growing a strong near term renewal in air freight growth seems unlikely. .
Year on Year
Comparison
July 2011 vs. July 2010 YTD 2011 vs. YTD 2010
RPK ASK PLF FTK AFTK FLF RPK ASK PLF FTK AFTK FLF
International 7.3% 7.2% 83.1% -0.4% 4.6% 49.8% 7.8% 9.2% 77.1% 1.5% 7.3% 51.2%
Domestic 3.5% 2.3% 82.9% -0.4% -0.2% 27.6% 4.0% 2.7% 78.9% -1.9% 0.1% 28.0%
Total Market 5.9% 5.4% 83.1% -0.4% 3.6% 45.0% 6.4% 6.8% 77.7% 1.0% 5.6% 46.2%
RPK: Revenue-Passenger-Kilometers; ASK: Available-Seat-Kilometers; PLF: Passenger-Load-Factor; FTK: Freight-Tonne-Kilometers; AFTK:
Available Freight Tonne Kilometers; FLF: Freight Load Factor;
All Figures are expressed in % change Year on Year except PLF and FLF which are the load factors for the specific month.
IATA Economics www.iata.org/economics
1

Air Transport Market Analysis
July 2011
Airlines have been keeping the expansion of seat capacity growing at a relatively steady pace throughout the
past year. That led to load factors falling sharply when demand was hit by a number of shocks earlier this year.
The stronger traffic seen during Q2 and July has allowed the average load factor on passenger markets to
recover to its peak of Q3 last year;
The picture differs on air freight markets. Growth in capacity coupled with stagnating air freight markets has led
to a steady deterioration in the average air freight load factor, which has fallen 4 percentage points since early
2010 and is now back to the level prevailing before the recession.
COMPARING JULY TO JUNE
Month on Month
Comparison
July 2011 vs. June 2011
RPK ASK PLF pt FTK AFTK FLF pt
International 2.0% 0.6% 1.1% 0.6% 0.6% 0.0%
Domestic 1.2% 0.4% 0.6% -0.1% 0.9% -0.3%
Total Market 1.7% 0.6% 0.9% 0.5% 0.7% -0.1%
Data are seasonally adjusted.
All figures are expressed in % change month on month except, PLF pt and FLF
pt which are the percentage point difference between load factors of two
consecutive months.
PASSENGER MARKET
International Market
The month-on-month comparison gives a
similar broad picture to the year-on-year
comparison shown on page 1, because
there was no major disruption in July last
year to distort the growth rates;
The figures clearly show the relative
strength of international air travel, the
improvement in passenger load factors,
the weakness of air freight demand and
the deterioration of load factors in these
markets.
International Passenger Market
Source: IATA
International Passenger Growth by Region
Source: IATA
Monthly RPKs (Billion)
300
280
260
240
220
200
180
Actual
Seasonally Adjusted
% Growth in RPKs
12%
10%
8%
6%
4%
2%
0%
-2%
-1.9%
6.6%
3.9%
4.9%
9.1%
9.3%
8.2%
10.3%
7.0%
9.7%
2.4%
Jun-11
3.9%
Jul-11
7.3%
6.0%
160
2006 2007 2008 2009 2010 2011
-4%
Africa Asia/Pacific Europe Latin Middle East North
America
America
Industry
July (and August) are always the seasonal high points for air travel due to the timings of holidays in the North.
But even after adjusting for this seasonal boost the chart above shows that there was a further underlying
expansion in air travel in July.
By July the level of international air travel markets was up 7% so far this year and was 12% higher than the prerecession
peak in early 2008. This has been an encouraging performance. However, to put this in perspective,
if air travel had continued to grow at the 8% pace seen before the recession the size of the market would have
been an additional 14% higher than today’s (July 2011) level. Air travel markets have recovered above the prerecession
level but it looks as though 2 years of growth were permanently lost as a result of the recession;
As the chart below shows there has been an encouraging recovery of load factors on international air travel
markets, following the sharp decline earlier this year. This has not been due to cutbacks in capacity – in fact
there has been a moderate acceleration in capacity growth – but because of the rebound in demand.
IATA Economics www.iata.org/economics 2

Air Transport Market Analysis
July 2011
80%
78%
Passenger Load Factor on International Market
Seasonally Adjusted
Source: IATA
90%
85%
80%
Jul-10
International Passenger Load Factor by Region
Source: IATA
80.9%
Jul-11
80.2%
84.8% 85.1%
80.3%
82.6%
80.8%
81.4%
87.2%
86.8%
83.0%
83.1%
% of ASKs
76%
% ASKs
75%
70%
71.9%
73.1%
74%
65%
72%
2006 2007 2008 2009 2010 2011
60%
Africa Asia/Pacific Europe Latin
America
Middle East
North
America
Industry
Domestic Market
190
180
170
Domestic Passenger Market
Source: IATA
25%
20%
15%
16.0%
Domestic Passenger Growth by Country
Source: IATA
17.8%
15.9%
20.6%
Jun-11
Jul-11
Monthly RPKs (Billion)
160
150
140
130
120
Actual
Seasonally Adjusted
% Growth in RPKs
10%
5%
0%
-5%
-10%
-15%
-20%
1.5%
2.7%
4.9%
5.1%
-20.3%
-16.7%
1.3%
2.1%
2.4%
3.5%
110
2006 2007 2008 2009 2010 2011
-25%
Australia Brazil China,
P.R.
India Japan USA Industry
Domestic air travel in aggregate has been much more sluggish than air travel on international markets. There
has been very little growth since the end of the third quarter of last year. This is partly because of mature US
market and its sluggish economy. Domestic US markets have shrunk 2% over the same period and represent
50% of worldwide domestic air travel. China is the second biggest market. Growth in this domestic market
slowed abruptly in the middle of 2010 from annual rates close to 20% to a pace of expansion of around 5%.
These two markets represent almost 70% of domestic air travel. Coupled with the impact of the still unrecovered
shock in Japan they have more than offset the strong growth still being seen on India and Brazil’s domestic
markets, which continues to be driven by strong economic growth and previous market liberalization.
80%
Passager Load Factor on Domestic Market
Seasonally Adjusted
Source: IATA
90%
Domestic Passenger Load Factor by Country
Source: IATA
86.5%
87.1%
Jul-10
87.3%
Jul-11
79%
78%
85%
80%
79.9%
83.6%
81.9% 82.9%
81.9%
% of ASKs
77%
76%
75%
% ASKs
75%
70%
65%
60%
69.3%
73.8%
71.8%
71.2%
63.0%
60.8%
74%
55%
73%
50%
72%
2006 2007 2008 2009 2010 2011
45%
Australia Brazil China, P.R. India Japan USA Industry
IATA Economics www.iata.org/economics 3

Air Transport Market Analysis
July 2011
Total Market (Domestic + International)
530
Total Passenger Market
Source: IATA
14%
Total Passenger Growth by Region
Source: IATA
Monthly RPKs (Billion)
480
430
380
% Growth in RPKs
12%
10%
8%
6%
4%
2%
4.3%
3.7%
4.7%
8.0%
8.5%
10.4%
12.1%
6.9%
9.8%
1.7%
Jun-11
2.8%
4.7%
Jul-11
5.9%
330
Actual
0%
Seasonally Adjusted
-2%
280
2006 2007 2008 2009 2010 2011
-4%
-2.4%
Africa Asia/Pacific Europe Latin Middle East North
America
America
Industry
Strong domestic air travel in Brazil added to the leading international growth performance of airlines from Latin
America in July. The total RPKs carried by these airlines rose 12.1% above a year earlier in July. However,
weakness in Japan and sub-par growth in China offset strong Indian domestic growth and depressed the growth
of total RPKs carried by airlines based in the Asia-Pacific region. North American airlines’ performance was also
weakened by domestic markets, which represent two-thirds of total RPKs for these airlines. European airlines,
with just 10% of their total RPKs coming from domestic markets, are benefiting from their stronger international
performance.
Average load factors on air travel markets have recovered to the highs of Q3 last year. North American and
European airlines continue to achieve the highest load factors. Latin American airlines have seen the largest
improvement.
80%
Passager Load Factor on Total Market
Seasonally Adjusted
Source: IATA
90%
Total Passenger Load Factor by Region
Source: IATA
86.9%
86.9%
79%
78%
85%
80%
Jul-10
79.9%
Jul-11
80.2%
83.8% 84.1%
79.6%
80.6%
81.5%
82.6%
83.1%
% of ASKs
77%
76%
75%
% of ASKs
75%
70%
71.3%
72.7%
76.5%
74%
65%
73%
72%
2006 2007 2008 2009 2010 2011
60%
Africa Asia/Pacific Europe Latin
America
Middle East
North
America
Industry
FREIGHT MARKET
International Market
15
International Freight Market
Source: IATA
International Freight Growth by Region
Source: IATA
14
10%
8%
8.4%
7.4%
8.4%
Jun-11
Jul-11
Monthly FTKs (Billion)
13
12
11
10
9
Actual
Seasonally Adjusted
% Growth in FTKs
6%
4%
2%
0%
-2%
-4%
-6%
-0.1%
-6.2%
-3.9%
-0.5%
-1.2%
2.5%
3.5%
-0.5%
2.0%
-2.7%
-0.4%
8
2006 2007 2008 2009 2010 2011
-8%
Africa Asia/Pacific Europe Latin Middle East North
America
America
Industry
IATA Economics www.iata.org/economics 4

Air Transport Market Analysis
July 2011
International air freight markets were marginally stronger than domestic markets in July. The volume of air
freight carried on international markets in July was up just over 1% from the start of the year. Now that air
freight markets have shrunk 5% from the peak reached in early 2010 the size of these markets in July was just
3% higher than pre-recession levels.
During the second half of 2010 the weakness of air freight was due to a loss of share of world trade to other
modes, partly due to the composition of goods traded. World trade was expanding strongly during that period
but other modes benefited. However, so far this year there has been no further growth in world trade – in part
because of the disruptions caused to electronics and automobile supply chains by the earthquake and tsunami
in Japan, but also a sign of economic slowdown. While this environment persists there is little scope for further
expansion in air freight volumes;
Capacity continued to expand throughout the eighteen months to July. Since air freight demand shrank 5% in
the past fourteen months load factors fell back to pre-recession levels.
The regional divergence in load factors largely reflects the importance of the Asia-Pacific region as the major
centre for manufacturing. Manufacturing, particularly industries such as electronics and capital goods, are key
shippers by air. As a result the major flows of these goods are out from the Asia-Pacific region, while inward
flows are much lower. Asia-Pacific airlines have the home carrier advantage in better utilizing their capacity and
achieve by far the highest load factors. At the other extreme are airlines from Africa, where manufacturing is
weak and the principle export – commodities – is mostly not shipped by air.
% of AFTKs
58%
56%
54%
52%
50%
48%
46%
44%
Freight Load Factor on International Market
Seasonally Adjusted
Source: IATA
% AFTKs
70%
65%
60%
55%
50%
45%
40%
35%
30%
25%
25.1%
25.9%
65.4%
International Freight Load Factor by Region
Source: IATA
62.5%
50.0%
47.6%
43.2%
41.8%
45.8%
44.2%
Jul-10
41.0%
38.8%
Jul-11
52.2%
49.8%
42%
2006 2007 2008 2009 2010 2011
20%
Africa Asia/Pacific Europe Latin
America
Middle East
North
America
Industry
Total Market
17
16
Total Freight Market
Source: IATA
10%
8%
7.4%
Total Freight Growth by Region
Source: IATA
8.2% 8.4%
Jun-11
Jul-11
Monthly RPKs (Billion)
15
14
13
12
% Growth in FTKs
6%
4%
2%
0%
-2%
-4%
-0.9%
-3.6%
-0.7%
-1.3%
2.7%
3.5%
-0.6%
1.0%
-2.5%
-0.4%
11
Actual
Seasonally Adjusted
10
2006 2007 2008 2009 2010 2011
-6%
-8%
-5.8%
Africa Asia/Pacific Europe Latin Middle East North
America
America
Industry
Air freight markets in total were depressed further by declines in domestic air freight, which in July was around
10% lower than prior to the recession. Airlines from most regions have experienced very weak air freight
businesses so far this year. During the first seven months of 2011 only airlines in the Latin American and Middle
East regions have seen volumes grow at a high single figure pace. Airlines in the Asia-Pacific and Africa
regions have seen the size of their air freight businesses decline;
IATA Economics www.iata.org/economics 5

Air Transport Market Analysis
July 2011
52%
50%
Freight Load Factor on Total Market
Seasonally Adjusted
Source: IATA
70%
60%
60.2%
Total Freight Load Factor by Region
Source: IATA
58.1%
Jul-10
Jul-11
% of AFTKs
48%
46%
44%
42%
% of AFTKs
50%
40%
30%
24.7%
25.5%
49.0%
46.8%
42.2%
39.9%
45.1%
43.6%
34.2%
33.0%
46.8%
45.0%
40%
20%
38%
2006 2007 2008 2009 2010 2011
10%
Africa Asia/Pacific Europe Latin
America
Middle East
North
America
Industry
.
IATA Economics www.iata.org/economics 6

ANNEX
Year on Year
Comparison
July 2011 vs. July 2010 YTD 2011 vs. YTD 2010
Air Transport Market Analysis
July 2011
RPK ASK PLF FTK AFTK FLF RPK ASK PLF FTK AFTK FLF
Africa 6.6% 4.9% 73.1% 8.4% 5.1% 25.9% 1.0% 4.7% 65.9% -1.6% 2.9% 26.5%
Asia/Pacific 4.9% 5.8% 80.2% -3.9% 0.5% 62.5% 4.1% 6.4% 76.2% -3.5% 2.4% 62.5%
Europe 9.3% 8.9% 85.1% -0.5% 4.3% 47.6% 11.0% 11.7% 78.1% 4.2% 8.7% 50.3%
Latin America 10.3% 7.2% 82.6% 7.4% 4.0% 43.2% 12.2% 8.8% 77.9% 7.0% 4.0% 43.0%
Middle East 9.7% 8.9% 81.4% 8.4% 12.4% 44.2% 8.9% 9.9% 75.2% 9.5% 14.1% 44.8%
North America 3.9% 4.4% 86.8% 2.0% 7.6% 38.8% 6.0% 8.6% 80.1% 5.3% 11.4% 41.4%
International 7.3% 7.2% 83.1% -0.4% 4.6% 49.8% 7.8% 9.2% 77.1% 1.5% 7.3% 51.2%
Australia 2.7% 0.2% 81.9% 4.3% 4.5% 77.9%
Brazil 17.8% 10.7% 73.8% 18.3% 11.0% 70.4%
China 5.1% 1.6% 86.5% 7.3% 2.8% 82.4%
India 20.6% 21.7% 71.2% 18.2% 18.6% 75.5%
Japan -16.7% -13.7% 60.8% -18.7% -12.4% 57.1%
US 2.1% 2.0% 87.3% 2.4% 2.0% 82.8%
Domestic 3.5% 2.3% 82.9% -0.4% -0.2% 27.6% 4.0% 2.7% 78.9% -1.9% 0.1% 28.0%
Africa 4.3% 2.3% 72.7% 7.4% 3.8% 25.5% -0.2% 2.5% 66.4% -2.5% 2.0% 26.1%
Asia/Pacific 4.7% 4.2% 80.2% -3.6% 0.0% 58.1% 4.5% 4.9% 76.6% -3.5% 1.9% 58.0%
Europe 8.5% 8.1% 84.1% -0.7% 4.0% 46.8% 10.1% 10.7% 77.2% 4.0% 8.3% 49.3%
Latin America 12.1% 7.7% 79.6% 8.2% 2.4% 42.2% 14.4% 9.6% 75.5% 7.3% 2.3% 41.4%
Middle East 9.8% 8.7% 81.5% 8.4% 12.1% 43.6% 8.3% 9.0% 75.4% 9.5% 13.5% 44.1%
North America 2.8% 2.7% 86.9% 1.0% 4.5% 33.0% 3.5% 4.1% 81.8% 2.5% 6.1% 34.5%
Total Market 5.9% 5.4% 83.1% -0.4% 3.6% 45.0% 6.4% 6.8% 77.7% 1.0% 5.6% 46.2%
RPK: Revenue-Passenger-Kilometers; ASK: Available-Seat-Kilometers; PLF: Passenger-Load-Factor; FTK: Freight-Tonne-Kilometers; AFTK:
Available Freight Tonne Kilometers; FLF: Freight Load Factor;
All Figures are expressed in % change Year on Year except PLF and FLF which are the load factors for the specific month.
IATA Economics www.iata.org/economics 7

Air Transport Market Analysis
July 2011
Month on Month
Comparison
July 2011 vs. June 2011 Market Share
RPK ASK PLF FTK AFTK FLF RPK FTK
Africa 4.5% 1.9% 1.7% 1.7% 0.4% 0.3% 3.2% 1.3%
Asia/Pacific 2.0% 1.2% 0.6% 1.7% 2.0% -0.2% 24.9% 43.3%
Europe 1.2% 0.5% 0.5% -0.3% 0.1% -0.2% 41.5% 24.4%
Latin America 1.9% 2.5% -0.5% 2.4% 1.6% 0.4% 4.2% 3.0%
Middle East 2.0% 1.0% 0.8% 4.2% 1.9% 1.0% 10.8% 11.4%
North America 1.3% 0.6% 0.5% 1.9% 0.0% 0.8% 15.4% 16.7%
International 2.0% 0.6% 1.1% 0.6% 0.6% 0.0% 100.0% 100.0%
Australia 0.8% 3.1% -1.8% 3.1%
Brazil 5.4% 2.8% 1.7% 3.5%
China 0.8% -0.2% 0.8% 18.1%
India 0.5% 2.4% -1.5% 2.7%
Japan 3.5% 1.3% 1.4% 2.7%
US 0.3% 0.0% 0.3% 49.7%
Domestic 1.2% 0.4% 0.6% -0.1% 0.9% -0.3% 100.0%
Africa 3.8% 1.7% 1.4% 1.6% 0.3% 0.3% 2.3% 1.1%
Asia/Pacific 1.6% 1.2% 0.3% 1.6% 2.1% -0.3% 26.9% 40.9%
Europe 1.3% 0.6% 0.5% -0.3% 0.1% -0.2% 29.8% 21.6%
Latin America 2.9% 2.0% 0.6% 2.6% 3.0% -0.1% 5.1% 2.9%
Middle East 2.0% 1.0% 0.7% 3.2% 1.9% 0.6% 7.3% 9.9%
North America 0.3% 0.2% 0.1% 1.1% 0.2% 0.3% 28.6% 23.6%
Total Market 1.7% 0.6% 0.9% 0.5% 0.7% -0.1% 100.0% 100.0%
Data are seasonally adjusted.
All figures are expressed in % change month on month except, PLF pt and FLF pt which are the percentage point
difference between load factors of two consecutive months.
IATA Economics
E-Mail: economics@iata.org
1 st September 2011
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