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IATA Reports Alarming Drop for September International TrafficOctober 27, 2008 By: George Dooley
The International Air Transport Association (IATA) announced global international traffic results for September, including a passenger traffic decline of 2.9 percent. International load factors tumbled by 4.4 percentage points from August to 74.8 percent in September.
“The deterioration in traffic is alarmingly fast-paced and widespread," said Giovanni Bisignani, IATA’s director general and CEO. "We have not seen such a decline in passenger traffic since SARS in 2003. Even the good news that the oil price has fallen to half its July peak is not enough to offset the impact of the drop in demand. At this rate, losses may be even deeper than our forecast US$5.2 billion for this year.”
Highlights of IATA’s report include:
* This is the first time since the SARS crisis in 2003 that global passenger traffic has shrunk. Capacity cuts were not able to keep pace with the fall in demand. September load factors in all regions fell compared to August.
* For September, all major regions reported that passenger traffic shrank, with the exception of Latin American carriers which saw an increase of 1.7 percent. Even this is shockingly down from the 11.9 percent growth of the previous month.
* Up to August, the drop in international passenger traffic was isolated to Asia Pacific carriers. The economies of the region’s two major growth markets— China and India— slowed and Japan saw industrial production drop 5 percent in August. The sharp downturn in world trade disproportionately impacted Asia Pacific carriers with a 6.8 percent drop in traffic in September.
* The steady 5 percent international growth of North American carriers turned into a 0.9 percent contraction.
* European carriers saw traffic drop from last year (-0.5 percent) as the region’s economies head for recession.
* After years of double-digit growth, passenger traffic by Middle Eastern carriers turned to a negative 2.8 percent. While the region’s oil-based economy remains strong, the large portion of transit traffic exposes the region’s carriers to the global economic weakness.
* African carriers posted the largest decline in traffic (-7.8 percent), a continuation of the previous month’s trend.
“The industry crisis is deepening— along with the crisis in the global economy,” said Bisignani. “Airlines, like all other businesses, are facing enormous challenges. But unlike other companies, they are denied some basic commercial freedoms— access to markets and to global capital— that could help them manage their business in this difficult time,” said Bisignani.