Things in the Sky

The International Air Transport Association (IATA) released its latest “Airlines Financial Monitor” report last week, and it has some interesting stuff for sure.

So, what does IATA think of the current environment? Well, I think these comments from IATA chief Giovanni Bisignani from a couple of days before this report was released make it pretty clear:

“It is far too early to call this a recovery. The worst may be over in terms of the fall in demand, but yields continue to be a disaster and costs are rising. The airline industry remains firmly in the red with a fragile business environment.”

Anyway, here’s the data I found interesting in the report. First off is demand, measured by RPKs and FTKs:

So, growth in RTKs has finally turned positive, and that’s a good thing. But unfortunately that doesn’t tell the whole story. Take a look at fares:

We’re seeing an improvement in the decline in fares, which is good. But it appears that that improvement in demand is coming from a decrease in fares. IATA reports that “the revenue environment remains extremely challenging.”

Like many other indicators, this data shows that while progress is being made, there’s still a ways to go.