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International Air Traffic Drops 21% in May

Search ASIA Travel Tips .com 2 July 2003

"The turmoil in the aviation industry intensified in May as the impact of the SARS crisis became more widespread and the global economy continued to struggle. The worst of SARS is likely behind us. The WHO has removed all SARS travel advisories and it is time to get back to business," said Giovanni Bisignani, IATA's Director General and CEO.

Preliminary IATA traffic figures for May 2003 show a 21% drop in international passenger traffic over May 2002, with SARS-hit Asia Pacific carriers experiencing a 50.8% drop, the worst performance among all of the regions. North American carriers, particularly those with significant exposure to trans-Pacific routes were hurt by SARS as well as the lingering impact of the Iraq War and the economic slump. International RPKs for North American carriers fell 20.6% over May 2002. European carriers experienced a fall of 5.5%, making them the least negatively impacted by the current industry crises.

With carriers reacting to the current crises, overall capacity for May 2003 expressed as available seat kilometres (ASKs) dropped 12.6% over May 2002. As a result of capacity reductions, the global load factor showed an improvement in May, rising to 64.6 from the 63.5% recorded in April. Globally, revenue passenger kilometres (RPKs) for the first five months of 2003 fell by 6.4% over the same period in 2002, while ASKs were slightly up at 1.2%.

Freight traffic however continued to grow. Overall May freight traffic saw a 3% increase in Freight Ton Kilometres (FTKs) over May 2002, and cumulatively the first five months of 2003 recorded an 8.7% increase over 2002. North American carriers are the only region to experience declines in freight traffic with a 5.9% drop in May 2003 over May 2002. The cumulative five month freight traffic growth for North American carriers remained positive with an 11.4% increase over the same period in 2002.

While passenger confidence is returning and passenger traffic is expected to rebound in June, Bisignani cautioned that full recovery will take time. "An increase in traffic is not a return to profitability. Major challenges remain. Most immediately, airlines must remain prudent in re-introducing capacity.  Secondly, industry-wide cost cutting efforts must be re-doubled to put our crippled balance sheets back in order. Finally, we must intensify the drive to revamp the outdated regulatory framework that prevents airlines from acting like modern businesses. The long-term recovery of the air transport sector, and all of the follow-on benefits that it will bring to the global economy, cannot occur if the airlines remain sick. These challenges must be met head-on," said Bisignani.

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