Air travel up 8% in 2010: IATA

After a tough 2009 airlines enjoyed a rebound in 2010, with passenger traffic up by 8.2 per cent, the International Air Transport Association said Wednesday.

Freight traffic was up by even more — 20.6 per cent, IATA said.

The growth in demand outstripped capacity increases of 4.4 per cent for passengers and about double that for cargo.

"The world is moving again," the body's outgoing president, Giovanni Bisignani, said. "After the biggest demand decline in the history of aviation in 2009, people started to travel and do business again in 2010."

Profitability, though, remains elusive, as margins are tight. "Airlines ended the year slightly ahead of early 2008 volumes, but with a pathetic 2.7 per cent profit margin," Bisignani said. "The challenge is to turn the demand for mobility into sustainable profits."

Harsh December weather in Europe and North America cut traffic for that month by one per cent. An ash-spewing Icelandic volcano earlier in the year was also a significant problem for the industry, as air travel across Europe was effectively halted for about a week.

North American carriers recorded year-on-year increases in passenger demand of 7.4 per cent in 2010. The industry benefited from being able to restrain itself from adding too much excess capacity. That helped push the North American industry's load factor to 82.2 per cent for the full year, up from 79.6 per cent in 2009.

Geneva-based IATA represents some 230 major international airlines.

The group forecasts 2011 will be a consecutive second year of profitability but with industry profits falling by 40 per cent to $9.1 billion. But IATA warned Wednesday that was based on an assumption that the price of benchmark Brent crude would be at $84 for the year. Brent has traded above $100 for the last several days.

"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," Bisignani said.