7.7 per cent increase in international passenger traffic in October

International passenger traffic increased 7.7% in October compared to the corresponding month in 2006, down slightly from the 8.2% growth recorded in September this year according to the International Air Transport Association (IATA) traffic results for October 2007.

Average international passenger load factors were 76.5% in October, down from the record levels in the summer but 1.2 percentage points higher than October 2006.

Passenger traffic growth for airlines in the Middle East (20.9%) continued its three-year trend of double-digit growth. In Latin America (19%) demand continued to expand following the impact of industry restructuring in 2006, according to IATA statistics.

African Airlines (10.8%) also enjoyed solid growth as grabbed a larger share of the rising demand in the region.

During the first 10 months of the year, passenger traffic grew 7.3% indicating that consumer demand for air travel remains robust in most regions even as some parts of the global economy, notably the US, dropped. Importantly, the credit crunch has yet to dampen demand.

According to IATA data economic volatility is having a more immediate effect on international air freight demand. It grew 3.6% in October compared to the corresponding month in 2006, down from the 5.0% year-on-year growth recorded in September, this year and partly reverses the strong pick up of freight growth seen in mid-2007.

Year-to-date freight demand has risen 4.0%. Leading air freight indicators such as semi conductor shipments and global manufacturing business confidence levels have dropped in recent months.

The demand for air freight is still expected to grow, but at a slower pace for the remaining part of the year.

According to statistics Middle East carriers saw freight demand improve slightly to 9.0% in October, largely reflecting increased capacity with new route development.

Asia Pacific Airlines saw a fall in growth rates, from 7% in September to 5.8% in October, partly due to slower growth in semi-conductor shipments. European carriers grew 2.0% and North America 0.6%. This reflects the strength of competition from other modes of transport and slower US economic growth.

"The numbers show that the fourth quarter will be challenging. With weakening confidence levels in manufacturing businesses and slower semi-conductor shipments we have already seen a slowdown in cargo growth from 5.0% in September to 3.6% in October," said IATA Director General and CEO Giovanni Bisignani. "Air Cargo is still expanding, but the industry has shifted gear to a slower pace of growth.

"Passenger demand remains strong, but this is a cyclical industry. The coming months will be critical to see if the impact of the credit crunch spreads from cargo to corporate and leisure travel."

"At the same time as the credit crunch casts a shadow over global economic performance, strikes in France and Japan in the last month are reminders of the need to keep labour on board with efficiency.

Airlines are still on track to show their first profit since 2001 this year.

That's good news. But with the US$ debt and oil soaring to record levels, it's no time to loosen the belt or the purse strings. Cost control is more critical than ever in all corners of the business," said Bisignani.

IATA (International Air Transport Association) represents some 240 airlines comprising 94% of scheduled international air traffic.