Air travel recovery hints that Europe could be back on the move

Air travel is highly sensitive to the economic climate and the airlines suffered terribly, losing billions of dollars (euros) as the global financial crisis of 2007-08 pushed the developed world economies deep into recession.

Now the industry is back at near pre-crisis levels, with passenger numbers jumping 11.9 percent in June as a booming Asia region drove the industry forward, the International Air Transport Association said on Wednesday.

“The industry continues to recover faster-than-expected but with sharp regional differences,” IATA Director General Giovanni Bisignani.

Much depends on Asia, and especially its powerhouse economy China where the government has begun to rein in some of the stimulus measures adopted to help the country get through the worst of the global slump.

That is a major concern too in Europe, where growth is less robust and governments have announced austerity programs in an effort to balance the public finances after spending massively on stimulus measures.

“Business confidence remains high and there is no indication that the recovery will stall any time soon,” Bisignani said.

“But, with government stimulus packages tailing off and restocking largely completed, we do expect some slowing over the months ahead,” he added.

Air freight grew 26.5 percent in June, IATA said, a crucial indicator of overall business activity that has been matched in a recent improvement in the Baltic Dry Index, which reflects demand for cargo vessels which carry the goods we buy in the shops.

This indicator has lost about 60 percent over the past 15 months, reflecting the savage impact of the global slump on trade, but last week it posted a notable rise, to 1,826 points from the previous week's finish at 1,720.

Analysts at Fearnleys maritime agents said they were seeing a pick-up in demand which would suggest that the index was turning for the better.

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