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IATA Reports Traffic Slowdown ContinuesSeptember 30, 2008 By: George Dooley
The International Air Transport Association (IATA) released international traffic data for August that confirmed a continuing downturn. International passenger demand growth slowed to 1.3 percent, following disappointing growth of 1.9 percent in July. Passenger load factors fell to 79.2 percent, a sharp drop-off from the 81 percent recorded during the same period last year as capacity growth outpaced demand.
“Passenger traffic grew by 5.4 percent in the first half of the year," said Giovanni Bisignani, IATA’s director general and CEO. "That slowed to 1.9 percent in July and 1.3 percent in August. The contrast between the first half of the year and the last two months is stark. The slowdown has been so sudden that airlines can’t adjust capacity quickly enough. While the drop in the oil price is welcome relief on the cost side, fuel remains 30 percent higher than a year ago. And with traffic growth continuing to decline, the industry is still heading for a $5.2 billion loss this year.”
Highlights of IATA’s data:
* Asia Pacific carriers reported a 3.1 percent contraction, following a 0.5 percent decline in July. Economic distortions surrounding the Olympics in China and a weakening Japanese economic outlook contributed to the decline. While some recovery in this weak performance is expected in coming months, clearly the region’s economies are feeling the impact of the turmoil in the financial markets.
* Middle Eastern carriers saw traffic growth drop to 4.3 percent, following 5.3 percent in July, and well below the 10.6 percent growth recorded during the first six months of the year.
* In contrast, international passenger traffic carried by North American airlines accelerated from 4.2 percent growth in July to 5.2 percent in August, in Latin America from 8.1 percent to 11.9 percent and in Europe from 1.3 percent to 1.6 percent.
* August is usually the second strongest month of the year, but the 79.2 percent load factor achieved was 1.8 percent lower than last year, although scheduled capacity is planned to slow very sharply to the point where it barely grows by the end of the year.
“The industry crisis is deepening and no region is immune,"said Bisignani. "Urgent measures are needed. From taxation to charges and operational efficiencies, all areas impacting the business must be examined for ways to reduce costs and drive efficiencies. It’s a matter of survival.”