Despite the slowing economy, Canadian passenger traffic experienced continued growth in the first quarter of 2008 across all sectors.  But it remains to be seen what impact continued high fuel costs will have on air travel in Canada, with Airports Council International (ACI) reporting that April traffic growth worldwide slowed and traffic in North America was down.

For the first quarter, Canadian domestic traffic was up 6.5% while transborder traffic was up 4.8% and overseas traffic up an impressive 11.8%. This compares to figures from the International Air Transport Association indicating that worldwide passenger traffic was up 4% in the first four months of the year.

International traveller data from Statistics Canada indicate that much of Canada's passenger growth came from Canadian travellers.  U.S. resident air travel visits to Canada were once again down for the quarter -- 5.6% -- while Canadian visits by air to the U.S. were up 13.5%.  While other international resident direct visits to Canada were up just 3.4% in the quarter, Canadian visits overseas were up 13.4%.

World Traffic Growth Slows in April

It remains to be seen what kind of impact in Canada will come from the fuel cost spike that intensified toward the end of the first quarter.  On May 21st, Air Canada President and CEO Montie Brewer said at the carrier's annual general meeting that "the rapid rise and volatility of fuel prices...will impact customer demand."

According to Oil Price Information Service wholesale jet fuel prices averaged $3.77 a gallon in May -- an increase of more than 37.3 cents per gallon over April and $1.70 a gallon over last year.  Jet fuel prices reportedly have increased 418% over the past 5 years.

ACI reports that global passenger traffic slowed markedly in April 2008 compared to April 2007, although the worldwide average for the past 12 months remained at 5%.  International traffic, which in previous months buoyed overall traffic results, grew by a modest 2%, and domestic traffic fell by 5.4% compared to April 2007. 

ACI contends the drop reflects the impact of slowing economic growth and high fuel prices on airline fares and consumer confidence.  The largest domestic market, North America, was down by 13% as a result of U.S. flight cancellations (American Airlines mandatory groundings), ongoing route reduction and carrier consolidation in the U.S., and the absence of Easter holiday travel (in March in 2008 and in April in 2007). 

Significant additional domestic capacity cuts were being announced by mainline U.S. carriers as we prepared this newsletter to be issued.

Recent U.S. Air Carrier Capacity Reductions for Q4 2008
Airline	Date	Aircraft Removed	Q4 Capacity Reduction	Jobs Lost
Continental	June 5	67 Boeing 737-300s/-500s	11% mainline domestic 6.2% overall	3,000
United	June 4	94 Boeing 737s 6 Boeing 747s	9.5-10.5% mainline domestic 8-9% overall	1,400- 1,600
American	May 27	40-45 MD-80s/A300s 40-45 Regional Jets	11-12% mainline domestic 7-8% overall	400

Freight traffic growth worldwide was steady for April 2008 with a 4% increase worldwide, as compared to April 2007, with strongest growth in international traffic (up by over 5%) and for the past 12 months by 6%.  North American domestic freight declined 0.1% (3.7% for the previous 12-month period) with the continuing impact of high fuel prices making other modes of transport more attractive.

For more detailed results, see the ACI press release.

For the second year in a row, the CAC participated in an airports supplement in the Globe and Mail. 

Many thanks to our sponsors - Aéroports de Montréal, Aéroport de Québec, the Canadian Air Transport Security Authority, Greater Toronto Airports Authority, Kelowna International Airport and Toronto City Centre Airport!

 

Enviro.aero, the environmental awareness campaign from the Air Transport Action Group, has launched a new YouTube channel for campaign videos.

The campaign is an initiative of the commercial aviation industy.  There are many myths and untruths about aviation's impact on the environment. The aim of Enviro.aero is to set the record straight.

The Enviro.aero Web site has seen a significant boost recently, with traffic to the site doubling since the Aviation & Environment Summit. There now are more than 2000 Web sites linking to enviro.aero, which now is in the top three Google search results for "aviation environment."

To sign-up for Enviro.aero's "Cleaner Skies" newsletter, click here.

The CAC hosted its third cargo forum on May 22nd, with the Cargo Competitiveness Forum in a Toronto.

The event was well attended by about 70 members of Canada's air cargo sector representing airports, air carriers, cargo handlers, couriers, freight forwarders and government.  A wide range of topics were covered under the general themes of cargo security, competitive costs, quality of handling, and northern operations.

The Cargo Competitiveness Forum was hosted by the Cargo Sub-Committee of the CAC.  The committee will evaluate the event and consider plans for future events.