Air transport industry sees record drop in demand

Air transport industry sees record drop in demand

The international air transport industry ended 2009 with the largest ever post-war decline, according to newly released statistics by the International Air Transport Association (IATA). “In terms of demand, 2009 goes into the history books as the worst year the industry has ever seen.

We have permanently lost 2.5 years of growth in passenger markets and 3.5 years of growth in the freight business,” said Giovanni Bisignani, IATA’s Director General and CEO.Passenger demand for the full year was down 3.5% with an average load factor of 75.6%. Freight showed a full-year decline of 10.1% with an average load factor of 49.1%.

“Revenue improvements will be at a much slower pace than the demand growth that we are starting to see. Profitability will be even slower to recover and airlines will lose an expected US$5.6 billion in 2010,” said Bisignani.International passenger capacity fell 0.7% in December 2009 while freight capacity grew 0.6% above December 2008 levels. Yields have started to improve with tighter supply-demand conditions in recent months, but they remained 5-10% down on 2008 levels.

Seasonally adjusted demand figures for December compared to November 2009 indicate a 1.6% rise in passenger traffic while freight remained basically flat with a 0.2% decline.“The industry starts 2010 with some enormous challenges. The worst is behind us, but it is not time to celebrate.

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,” added Bisignani.“We also face a renewed challenge on security as a result of the events of 25 December 2009. We agreed that governments and industry must cooperate and we are preparing for a meeting in the coming weeks to follow-up on our recommendations which focused on finding more efficient ways to implement intelligence-driven and risk-based security measures,” said Bisignani.“Governments and industry are aligned in the priority that we place on security. But the cost of security is also an issue.

Globally, airlines spend US$5.9 billion a year on what are essentially measures concerned with national security. This is the responsibility of governments, and they should be picking up the bill,” said Bisignani. IATA represents some 230 airlines comprising 93% of scheduled international air traffic

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