Macroeconomic overview and traffic trends

In some respects the economy improved in 2010, although on the whole, the recovery was weaker than expected.

Economic growth in the first half of the year was greater than 5%1, driven first by a strong phase of inventory replenishment and later by an upturn in investment. As in previous years, emerging countries took the lead, while growth rates for the more developed countries were lower than average (+3.50%)2.

The recovery seems to be meeting more resistance in developed countries, which were the hardest hit by the financial crisis of 2008-2009. Improvements in the economy in these countries are not translating easily into higher employment and consumption. In general, spending is still relatively low throughout the OECD area.

In the United States, today’s lacklustre consumption is partly a correction of exorbitant pre-crisis spending, made possible by excessive household debt. The increased tendency to save is certainly good news for the medium to long term, but at the moment it is impeding the recovery. GDP did grow by 2.6% in 2010, after slumping by 2.6% the previous year.
However, this is still not reflected in job growth: the US unemployment rate rose in 2010, from 9.3% in 2009 to 9.7%1.

In Europe, consumption seems to be held back mostly by the uncertain economic outlook; budget and deficit problems in several member states are preventing them from adopting a recovery strategy and raising concerns about monetary stability. That the recovery is taking longer in Europe is confirmed by estimated GDP growth of just 1.4%, after a contraction of 4.1% in 2009. Employment is also on the rise, and exceeded the 10% threshold in 20101.

In general, the global economy could remain on shaky ground until governments and supranational institutions decide to deal with the necessary and challenging process of stabilisation, both within the major countries (where fiscal intervention should make way for the upturn in private demand) and internationally (where developed countries, the United States above all, need to improve their current account balance of payments while emerging countries like China need to limit their surpluses and work on building domestic demand). The fact that these stabilisation processes are still far from taking root means that the recovery could remain fragile and of limited scope.

One of the macroeconomic variables of greatest importance to Autogrill, especially in the airport channel, is the level of commercial trade around the world.

In 2009 international trade shrank by 12%, with a record drop of 30% year-on-year in the six months comprising the final quarter of 2008 and the first quarter of 2009, which struck developed and emerging countries practically without distinction. The downward trend reversed in the second half of 2009, and 2010 saw further improvement: for the period including the last two quarters of 2009 and the first quarter of 2010, trade increased by 20% on an annualised basis.

Despite the upturn, however, growth in worldwide trade is still below pre-crisis levels, and in many countries the total volume traded has not recovered to where it stood in 2007.

The recovery, limited though it is, has caused the price of oil to rise again after the lows reached in late 2008 and the first quarter of 2009. On average, crude oil traded $ 83 per barrel in 2010, up from $ 74 the previous year.

The air transport industry has responded very well to the improvement in the trade scenario, given that crude oil prices are still at a manageable level. After suffering through one of the worst years ever in 2009, when global air traffic decreased by 3.1%, the industry made a strong recovery this year: according to IATA estimates, revenue from passenger traffic–which had fallen from $ 444b in 2008 to $ 374b the following year–climbed back to $ 437b in 20102.

Airlines reported excellent earnings in 2010, but remained cautious about boosting capacity, after the substantial reductions made the previous year especially in North America.

Airport traffic responded well to the upturn in trade, enjoying growth in 2010 in the main countries served by the Group.
However, progress was limited by a number of adverse weather and environmental events, such as a cold spell on the Atlantic coasts of North America and Europe in January, February and December and the long series of flight cancellations in European skies in April due to ash from the Eyjafjallajökull volcano in Iceland, not to mention personnel strikes at British Airways and Iberia and AENA’s air traffic controllers’ strike in Spain.

On the whole, therefore, traffic growth was slower than expected: +1.7% (January-December) in the United States; +2.7% in Spain (after falling by 8.1% the previous year); a continued decline in the United Kingdom (–3.1%), which was hardest hit by the volcanic ash interruptions in April.

Just as modest (and somewhat volatile) was the growth in motorway traffic, especially in Europe. In Italy, Autogrill’s largest market for the motorway channel, traffic was down by 0.4% (January-December); but this owes entirely to the favourable comparison with the first quarter of 2009, when traffic growth had reached an all-time low of –6.9% year-on-year. The trend was more dynamic in the United States, where motorway traffic grew by 1.8% from January to December.

1 International Monetary Fund: World Economic Outlook, October 2010
2 IATA – Industry Financial Forecast – December 2010