IATA Reports Decline in Air Traffic

The International Air Transport Association (IATA) reported international scheduled traffic results for January showing a deepening year-on-year demand slump. International passenger demand fell by 5.6 percent in January 2009 compared to the same month in 2008. It is also a full percentage point worse than the 4.6 percent year-on-year drop recorded in December. The January fall in demand is the fifth consecutive month of contraction.

“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.

The 5.6 percent drop in passenger demand outpaced capacity cuts of 2 percent driving the load factor to 72.8 percent— 2.8 percent below what was recorded for January 2008.

"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.

Asian carriers led the decline in passenger demand with an 8.4 percent year-on-year drop in January. While this is slightly better than the 9.7 percent 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). Capacity in the region contracted 4.3 percent.. With Japan, the region’s largest market for air travel, expected to see its economy contract by an unprecedented 5 percent in 2009, the prospects for traffic in the region remain dismal, according to IATA.

North American carriers posted the second largest passenger decline at 6.2 percent led by a decline in Trans-Pacific travel. In response, carriers withdrew 2.6 percent of their international capacity, clawing back some of the expansion of 2008, IATA reported.

Visit www.iata.org.

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