IATA: no signs of imminent recovery

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IATA is attaching a bit caution to its April traffic statistics released today, warning the Easter holiday positively skews its data by roughly 2%.

The association's international traffic data showed a 3.1% drop in passenger demand last month compared with an 11% slide in March. But along with the skewing from the April holiday IATA also explains traffic gains were at the expense of yields in most regions.

IATA warns of a weaker performance in May as it estimates a double-digit fall in traffic growth, "at least for European airlines".

April's 3.1% drop still outpaced the 2.5% decline in capacity as IATA says no revenue improvement exists, with yields continuing to fall.

"The worst may be over," says IATA director general Giovanni Bisignani. "However, we have not seen any signs that recovery is imminent."

Carriers in the Asia Pacific region continue to face the steepest declines in demand, as the area's 8.6% drop in traffic during April outpaced capacity decreases of 7.4%.

Fare discounting bolstered an increase of demand on North Atlantic routes. North American carriers saw a 13.4% drop in demand for March shrink to 4.2% in April, which was closely aligned with the 4.4% fall in capacity.

European carriers also closely aligned their 2.6% drop in capacity to the 2.7% fall in traffic for April after posting an 11.6% slide in demand in March.

Both the Middle East and Latin America posted increases in demand of 11.2% and 7.5%, respectively as capacity in the Middle East jumped 12.3% and grew 6% in Latin America.

The 7.1% drop in demand for African carriers outpaced 5% capacity cuts.

Cargo continued its weak performance; however, IATA explains the 21.7% fall in international cargo for the month of April is the fifth consecutive month of a decrease in the 20% range.

"This sideways progression may indicate that we have seen the worst of the economic downturn," IATA says. "Business confidence is improving, but inventories remain high. Until inventories adjust to more normal levels, air freight volumes will likely continue to bounce along the bottom."