Ireland's traffic for March remains steady but there are tentative signs of optimism for the summer

Ireland’s commercial traffic for March 2011 grew by +0.1%, registering 1,347 average daily flights, compared to the +1.2% change in the year to date, while five of Ireland’s Top Ten Airport Pairs showed positive growth in March 2011 compared to the same period last year.

En route traffic movements in Irish controlled airspace (flights, the majority of which do not land in Ireland) showed an increase of +1.5% in March 2011, on comparable figures for March 2010 and the analysis of North Atlantic Communications flights (Europe /US Flights) also saw a rise of +0.9% in March 2011.

The traffic trend for the three State airports in March 2011, when compared to March 2010, are as follows:

a) Commercial terminal flights at Dublin were down by -1%

b) Commercial terminal flights at Cork were down -11.3%

c) Commercial terminal flights at Shannon were down -12.9%

EUROCONTROL, the European organisation for the safety of air navigation, have noted in their latest short term forecast that a significant feature of 2011 will be a traffic bounce-back, comprising:

the fairly certain bounce-back from the ash-cloud disruptions which will add 1% point to total growth in 2011.

the less certain traffic recovery hinted at by the continuing high load factors as air carriers continue to search for the right level of capacity. EUROCONTROL have identified however that there are a number of notable risks to this forecast:

The economic uncertainty, as austerity measures in a number of major European markets begin to bite and as other States are pushed towards austerity. The potential for fuel prices to continue to rise, limiting airlines’ willingness to increase flight frequencies.
The interaction between the strategies of airlines and changes to aviation taxation. With tax increases in Germany, UK and Austria, and decreases in Ireland, airline responses are likely. Already cuts amounting to 1% of German local traffic have been mentioned.

The short-term forecast is strongly influenced by recent trends in growth, but these have been very variable. After the experience of Summer 2010, there is reason to think that some of the State-level forecasts for the Summer months of 2011 are on the low side – the high load factors suggest unsatisfied demand. Even on moderate economic growth, higher growth in flights would be quite feasible for some States.

The above issues from EUROCONTROL are also mirrored in the International Air Transport Association’s (IATA) Airline Financial Monitor for February – March 2011 which notes the following;

Airline share prices have lost 10% so far this year, as financial markets worry about the exposure to oil;
Fuel costs had already begun to squeeze airline profits in Q4 2010, when improvement slowed sharply;
Jet fuel prices, at $134 a barrel, now triple early 2009 levels as supply shocks add to demand pressure;
International air travel and freight markets were hit in February by political instability in North Africa and Middle East. International traffic figures are estimated to have been distorted by about 1%;

Capacity expanded at a higher pace than demand producing lower load factors limiting scope for cost recovery;
Passenger yields have risen since September 2010, but by only around one-tenth of the 70% rise in fuel prices;
Airline Fleet in service continued to expand with new deliveries.