Air travel and freight volumes have climbed back to levels seen at the end of 2008, but the global airline industry still faced a likely $11-billion in losses this year, the International Air Transport Association (Iata) reported on Tuesday.

Iata’s ‘Airlines Financial Monitor’ for October and November highlighted that travel and freight volumes have recovered to levels seen at the end of the 2008, but have not recovered half the losses suffered during 2008.

Air travel improved by 6% between the first quarter of 2009 and the third quarter, but remained 5% below the levels achieved in early 2008. Air freight volumes in the third quarter of the year were up by 14% compared with the lows reached in December 2008, but were still 15% below the levels achieved in January 2008.

“The direction is positive but there is still a long way to go,” Iata stated.

The financial performance of airlines, besides those in Europe, also showed improvements during the third quarter of the year, which generally benefited from stronger seasonal traffic.

Iata noted that a sample of 75 airlines had reported a net profit of $700-million, compared with a net loss of $3,4-billion in the third quarter of 2008.

Airline profits had been positively impacted on by the level of the spot oil price, which averaged at $76/bl in the third quarter of the year.

Jet fuel prices were now, however, on the increase again and would likely “squeeze” cash flows, going forward.

Further, the report showed that while airline equity prices had also recovered, improving 15% since the beginning of 2009, world airlines were still only valued at about 50% of their 2007 highs.

Financial markets had also taken a different view on airlines in different regions, with those in Asia viewed in the most positive light. US airlines, by contrast, had lost about 30% of their value.

Nevertheless, the global airline industry has managed to raise $2,5-billion, mainly in debt, but also in equity, in late November.

CAPACITY AND LOAD FACTORS

Meanwhile, the airline industry had continued to cut capacity in the third quarter, a trend that would likely occur again in the fourth quarter.

Seat kilometer capacity was cut by 5% in 2008 and by a further 1,7% in 2009, while freight ton kilometer capacity was reduced by 9% during 2008 and by a further 4,6% this year.

Further cuts in passenger capacity, along with a rise in demand, had resulted in higher passenger load factors, which in turn led to an improvement in airfares and passenger yields from the lows seen in mid-2009.

However, high load factors were not a sign of high utilisation rates by airlines, with both narrow and widebody passenger aircraft utilisation down 6% from early 2008 levels, Iata reported.

Aircraft deliveries had also remained above the 100 a month level in October, despite many airlines deferring deliveries in an effort to cut down on capital expenditure and to preserve cash, stated Iata.

In comparison, only about 40 aircraft had been taken out of service and put into storage in October, which meant that the global aircraft fleet was expanding, despite efforts to cut back on capacity.

Iata pointed out that while the passenger fleet was continuing to expand, more than 200 freighters had been taken out of service since early 2008, leading to better aircraft utilisation levels.

Higher capacity cuts and higher demand in the freight market, compared with that of the passenger market, also led to a sharp rise in load factors since the end of 2008.