IATA’s international scheduled traffic figures for
January 2009 show a deepening year-on-year demand slump.
International passenger demand fell by 5.6% in
January 2009 compared to the same month in 2008. It is also a full
percentage point worse than the 4.6% year-on-year drop recorded in
December. The January fall in demand is the fifth consecutive
month of contraction.
The 5.6% drop in passenger demand outpaced
capacity cuts of 2% driving the load factor to 72.8% - 2.8%
below what was recorded for January 2008.
collapse in cargo markets in December (-22.6%) worsened in January
2009 with a 23.2% year-on-year demand drop. This is the eighth
consecutive month of contraction for freight traffic.
“Alarm bells are ringing everywhere. Every region’s carriers are
reporting big drops in cargo. And, aside from the Middle East
carriers, passenger demand is falling in all regions. The industry
is in a global crisis and we have not yet seen the bottom,” said
Giovanni Bisignani, IATA’s Director General and CEO.
Asian carriers led the decline in passenger
demand with an 8.4% year-on-year drop in January. While this is
slightly better than the 9.7% contraction in December, this is
positively skewed by Chinese New Year which fell at the end of
January 2009 (and which was in February the year before).
in the region contracted 4.3%. With Japan, the region’s largest
market for air travel, expected to see its economy contract by an
unprecedented 5% in 2009, the prospects for traffic in the region
North American carriers posted the second
largest passenger decline at 6.2% led by a decline in
Trans-Pacific travel. In response, carriers withdrew 2.6% of their
international capacity, clawing back some of the expansion of
European carriers offset a 5.7% decline in demand with a
3.6% decrease in capacity. Demand decreased sharply from the 2.7%
fall in December as European economies move into deep recession.
Latin American carriers saw a modest decline of 1.4%. Even
against a 0.5% increase in capacity, the region turned in the
highest load factors at 74.9%.
African carriers saw the demand
decline slow from an average 4% in 2008 to 2.6% in January.
The Middle East was the only region with a positive traffic growth
of 3.1%. This is far below both the double-digit traffic growth in
2008 and the 10.8% expansion in capacity.
Pacific carriers, representing 43% of the market, led the cargo
decline with a 28.1% year-on-year drop. This was followed closely
by the other major market players: European carriers (-23%) and
North American carriers (-19.3%).
While this may appear to be
relatively stabilised compared to the precipitous December drop,
it is too soon to call a bottom in the air freight market
Manufacturers are still shedding inventory and cutting production
which is expected to lead to further falls in freight volumes.
“The only good news is that fuel prices remain well below last
year’s level. But the drop in demand is much more harmful. The
industry is shrinking with revenues expected to fall by US$35
billion to US$500 billion, delivering a loss of US$2.5 billion
this year,” said Bisignani.
“Airlines remain in intensive
care, but while others ask for government bailouts, our demands on
Governments are much more modest. First, don’t tax us to
death in order to pay for investments in the banking
industry. This includes the UK government’s plans to
increase its multi-billion pound Air Passenger Duty and
the Dutch Government’s misguided departure tax,” Bisignani
In 2008, even as governments
delivered tax breaks to stimulate economic growth, the airline
industry took on an additional tax burden of US$6.9 billion.
“Second, give airlines the commercial freedoms that every
other business takes for granted. With the world’s capital markets
in disarray, archaic ownership restrictions are an unnecessary
burden that must be lifted. Today’s crisis highlights the need to
change the structure of this hyper-fragmented and fragile
industry,” said Bisignani, referring to IATA’s Agenda for Freedom
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