While airline passenger traffic continued to grow in the first half of 2011, the bumps in the road which have hit demand mean this growth has largely failed to keep pace with extra capacity.
Passenger traffic across virtually all regions has grown this year. Latin American carriers enjoyed double-digit growth. European operators also delivered large traffic gains, but these figures are partly distorted by the ash-cloud disruption which hit hard in 2010.
Asia-Pacific carriers largely saw growth too, with the exception of Japanese operators All Nippon Airways and Japan Airlines. They suffered traffic disruption resulting from this year's devastating earthquake in Japan.
Similarly, political unrest in parts of North Africa and the Middle East during the first half has also had an impact on passenger traffic demand, for local carriers and beyond. Such volatility challenges airlines' ability to track capacity with demand. Careful capacity discipline has been one of the keys to securing improved yields and profits.
However, during the first half of this year, demand at Asian, European and US major carriers has largely fallen short of additional capacity. Passenger load factors for most regions are down.
The picture remains mixed across the regions and business models. Indeed, new IATA director general Tony Tyler suggests the industry is living in several different realities. "With high load factors and an upward growth trend, the passenger business is doing better than cargo," he says.
However, Tyler sees regional growth patterns shifting. "Middle East carriers have moderated to a single-digit expansion and tighter economic conditions have slowed China's growth.
"Latin America is leading the industry expansion followed by Europe, which is growing strongly despite its currency crisis.
"North America is underperforming the industry on growth, but leading on load factors."
For the second half of 2011, the key variables remain fuel and the economy. If fuel prices stay high, especially as hedges start unwinding, airlines could pull back capacity. Likewise, should recession fears in the USA and beyond materialise, airline traffic growth may be stifled.