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Global Air suffered worst drop in 2009


Global Air suffered worst drop in 2009
International air traffic suffered its worst post-war demand decline last year amid the worst financial crisis and recession since the Great Depression. 

January 28, 2010  By Ross Marowits | The Canadian Press

Jan. 28, 2010, Montreal – International air traffic suffered its worst post-war demand decline last year amid the worst financial crisis and recession since the Great Depression, an industry association said Wednesday.

Passenger demand dropped 3.5 per cent while scheduled carriers flew 75.6 per cent full, said the International Air Transport Association.

Cargo demand suffered an even bigger hit, falling 10.1 per cent, with an average load factor of 49.1 per cent.

"In terms of demand, 2009 goes into the history books as the worst year the industry has ever seen,'' said IATA director general Giovanni Bisignani.


He said the airline industry has lost 2.5 years of growth in the passenger market and 3.5 years in the freight business.

The situation started to improve in recent months, but the association expects international carriers will lose US$5.6 billion in 2010.

IATA represents some 230 airlines comprising 93 per cent of scheduled international air traffic. Its statistics don't include domestic traffic.

International passenger demand increased by 4.5 per cent in December and planes flew 77.6 per cent full as capacity fell 0.7 per cent.

Demand marked an 8.4 per cent improvement from the February low point, but was still 3.4 per cent below the early 2008 peak.

Revenues per passenger mile flown have started to improve following capacity reductions, but remained five to 10 per cent below 2008 levels.

"Revenue improvements will be at a much slower pace than the demand growth that we are starting to see,'' Bisignani said, noting that profitability will be even slower to recover.

The industry also faces a renewed security challenge from the attempted Christmas Day bombing of a Detroit-bound airline. Bisignani described the Obama administration's approach to security as encouraging but said airlines spend US$5.9 billion annually for
what is essentially national security.

"This is the responsibility of governments, and they should be picking up the bill."

Seasonally adjusted demand figures for December increased 1.6 per cent from November, while freight demand was almost flat.

Carriers in North America, Asia-Pacific and Europe recorded the largest year-over-year declines in passenger demand of 5.6, 5.0 and 5.6 per cent respectively in 2009.

Asia-Pacific carriers saw the largest up tick in December with an eight per cent improvement.

North American carriers declined by 0.4 per cent, while European carriers decreased 1.2 per cent in December.

Middle Eastern carriers generated the fastest growth in passenger traffic at the end of the year with a 19.1 per cent increase in December, and 11.2 per cent growth for the entire year.

Latin American carriers saw demand increase by 7.1 per cent in December even the impact of the H1N1 virus constrained full-year traffic growth by 0.3 per cent.

Freight demand increased by 24.4 per cent in December over a very weak period a year earlier.

Increasing optimism by purchasing managers pointed to freight volumes in the coming months.

"The industry starts 2010 with some enormous challenges. The worst is behind us, but it is not time to celebrate,'' added Bisignani.

"Adjusting to 2.5-3.5 years of lost growth means that airlines face another spartan year focused on matching capacity carefully to demand and controlling costs.''


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