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Strong passenger demand reflects economic growth

Business Brokerage The International Air Transport Association (IATA) is releasing international traffic data for May 2006 showing 7% growth in passenger demand and 5.1% growth for freight over the same period in 2005. Load factor for May achieved an average of 73.6%.

Employment of real estate agents and brokers is very sensitive to swings in the economy. During periods of declining economic activity and tight credit, the volume of sales and the resulting demand for sales workers falls. During these periods, the earnings of agents and brokers decline, and many work fewer hours or leave the occupation altogether.

Forex Broker Strong economies are supporting strong demand growth for both freight and passenger traffic. This positive demand environment is helping the global airline industry to offset some of the sharp increase in jet fuel prices. And it is helping airlines boost revenues by an average of 10% over the past three years, said Giovanni Bisignani, IATAs Director General and CEO.

These forecasts are mainly based upon growth expectations in European domestic demand of consumption and investment, and at the same time growth of foreign demand in the same fields.

Online Brokerage International passenger traffic grew 7% year on year, in May, down from the 9.9% growth in April when traffic was artificially boosted by the Easter effect. However, the 7% growth represents a pick-up in the underlying growth rate, helping to boost growth in the year to date to an above average 6.8%. Airlines are also benefiting from improved capacity utilisation. Capacity expanded by only 4.9%, driving load factors to 73.6%, which is 1.4% higher than in May 2005. For the first five months of the year, the Middle East continued to lead growth with a 17.8% increase over the same period in 2005.

It will be a different kind of growth to the boom years that have passed and a little less extreme. Whereas the main boom years were driven by extreme demand growth as a result of interest rates dropping from a peak of 25.5% prime late in 1998 to 10.5% by 2005, the expected strengthening from 2008 will be driven more by the combination of solid economic growth and growing constraints in housing supply, with interest rate reductions being very small in magnitude and thus playing a small role.

Real Estate Broker International freight traffic grew 5.1% year on year, in May, down from the 6.1% seen in April. A fall in freight traffic in Latin America largely due to the problems and lower volumes at Brazilian carrier Varig was the main factor behind the slowdown in the overall growth rate. Excluding Varig, other Latin American airlines were on track with 5% growth in May, similar to the global average. Overall, freight traffic remains on course to grow by at least double the 2005 rate, and we forecast growth of 7% for 2006 as a whole. For the first five months of the year, Middle Eastern carriers lead growth at 19.6%, followed by North America (6.5%), Latin America (5.3%) and Asia-Pacific (5.2%) with African and European carriers at 3.8% and 2.1% respectively.

"The strong performance of our brands, even in these challenging economic times, coupled with our stable presence in a volatile marketplace have created a demand for Choice brands throughout the franchise community, " Ledsinger said. "These changes in our sales structure are designed to meet that demand with enhanced brand consistency and a more strategic growth plan for each brand.

Agency Brokerage Spark Airlines continue to cut costs and improve efficiency but we must not let the strong revenue environment distract us from further change. Although load factors are at historically high levels, we need to continue to manage capacity carefully to make sure that record aircraft orders do not become our Achilles heel. There is a risk that high oil prices and rising interest rates in many major economies will trigger an economic slowdown later this year, removing the support provided by demand-led revenue growth. That is why even more efficiency and greater change are needed, said Bisignani.

The flipside of the coin is that improved economic growth potential should raise South Africa's ability to attract foreign capital inflows thus supporting the rand.

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