International scheduled traffic results compiled
by IATA for May
2009 show passenger demand declining 9.3% compared to the same
month in the previous year, while freight demand was down by
17.4%. International passenger load factors stood at 71.2%, down
from 74.5% recorded in May 2008.
The 17.4% decline in international
cargo demand is a relative improvement compared to the
21.7% drop in April 2009. Since December 2008, cargo
demand has been moving sideways in the -20% range.
International passenger demand weakened
from the -3.1% recorded in April to -9.3% in May. But both of the
past two months have been slightly stronger than the 11.1% decline
reached in March, even after adjusting for the distortions caused
by the timing of Easter.
This indicates that a floor may now have
been reached. However, the capacity adjustment of -5% in May did
not keep pace with the fall in demand during the same month.
Moreover, although the impact of the recession appears to be
stabilizing, strong headwinds from debt and low asset prices are
still expected to weaken and delay any significant recovery.
may have hit bottom, but we are a long way from recovery,” said
Giovanni Bisignani, IATA’s Director General and CEO. “Capacity is
not aligned with demand. Passenger load factors dropped
3.3 percentage points over the last 12 months. The
impact on revenue is dramatic. After a 20% fall in
international passenger revenue in the first quarter, we
estimate that the drop accelerated to as much as -30% in
May. This crisis is the worst we have ever seen.”
International Passenger Demand
the first full month to feel the impact of the Swine Flu
(Influenza A H1N1)
on travel. Mexican carriers saw their traffic fall almost 40% in
May. Latin American carriers saw their traffic decline by 9.2% in
May compared to the previous year. Against a capacity increase of
0.2%, the load factor plummeted to 64.7%. That is a 6.7 percentage
point drop compared to May 2008 and the lowest load factor among
all the regions.
IATA has estimated that the global impact of Influenza
A(H1N1) on global travel patterns in May was a 1% drop in
Asia Pacific carriers recorded a 14.3% fall
in demand. While capacity adjustments by the region’s carriers
were the most severe (-9.3%), they did not keep pace with the fall
in demand driven by weak economies and the impact of Influenza
A(H1N1) on the region with the most vivid memories of the SARS
North American carriers posted a 10.9% fall in
passenger demand, considerably worse than the 4.2% fall in April.
This was the result of weak demand to Latin American destinations
affected by Influenza A(H1N1) along with significant
recession-driven drops in both trans-Atlantic and trans-Pacific
European carriers, in additional to weak long-haul
markets, saw some loss of market share to European low cost
carriers whose traffic grew by 2.1%, while the network carriers
reported a 9.4% decline.
African carriers saw a slight
improvement of a 6% fall in demand in May, compared to a 7.1%
decline in April.
Middle Eastern carriers bucked the declining
trend with 9.5% growth in demand and a 14.5% expansion of
International Air Freight
In May, freight volumes
rose by around 3% above April levels as manufacturers began to add
to their product inventories in anticipation of an economic
However, inventories remain 10-15% higher than normal in
relation to sales levels, indicating that a significant recovery
is not expected in the near term.
Surveys of purchasing managers
indicate the industry could experience a further improvement in air freight
demand during June and July to levels that are 12-15% below last
Most regions were relatively aligned in the
severity of the freight declines. Latin American carriers were the
worst performers with a 21% fall, followed by Africa (-20%),
Europe (-19.2%), North America (-18.8%), and Asia Pacific
(-18.1%). Middle East carriers were the exception with a 3.7%
Capacity adjustments in freight markets have been
catching up to demand declines. Freight load factors are 3.6
percentage points lower than a year ago. Freight yields fell by
17% in the first quarter, reducing revenues by 35%.
continuing downward pressure on yields, even the improvement in
volumes in May will likely come without a corresponding
improvement in revenues.
“We have lost several years of growth
and yields are under severe pressure. Airlines are in survival
mode. Cutting costs and conserving cash are the priorities,” said
“Even if we look beyond the crisis, it
is difficult to see a return to business as usual. This
crisis is re-shaping the industry. The burden cannot be
placed on airlines alone. All partners in the value
chain must be prepared to change - reducing costs and
improving efficiencies. Too often we get the opposite.
Already this year we have seen US$1.5 billion in cost
increases from airports and air navigation service
providers. It’s irresponsible in the best of times and a
completely unacceptable abuse of monopoly position in a
crisis,” Bisignani added.
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