IATA Reports Second Month of Passenger Decline

The International Air Transport Association (IATA) reports that international air traffic declined for the second consecutive month in October, with passenger traffic falling by 1.3 percent. Global air traffic declined 2.9 percent in September. The October load factor of 75 percent was approximately 2 percent below previous year levels.

“The gloom continues and the situation of the industry remains critical,” said Giovanni Bisignani, IATA’s director general and CEO. "While the drop in oil prices is [a] welcome relief, recession is now the biggest threat to airline profitability. The slight slowing in the decline of passenger traffic is likely only temporary. The deepening slump in cargo markets is a clear indication that the worst is yet to come."

North American carriers experienced a decline of 0.8 percent in October compared to the previous year, only slightly changed from the 0.9 percent drop in September. As much as transatlantic traffic was flat for the month, European carriers had a slightly positive rebound in traffic with 1.8 percent growth in October.

Asia-Pacific carriers, which represent 31 percent of global international passenger traffic, saw passenger traffic decline by 6.1 percent (slightly improved from the 6.8 percent decline in September). A capacity reduction of 2.3 percent could not keep pace with the drop in demand, taking load factors for the region’s carriers to 72.2 percent. Year-to-date growth for Asia-Pacific carriers fell to 0.3 percent, the weakest growth outside of Africa.

African carriers experienced the largest decline, with international traffic dropping by 12.9 percent in October. It is the only region where traffic deteriorated relative to September. This continues the year-long trend of Africa being the weakest market for air traffic with falls in both intercontinental and regional travel.

Latin American and Middle Eastern airlines recorded 4.5 percent and 3.5 percent growth, respectively. While better than the September traffic figures, both regions remain well below the double-digit growth rates experienced over the first half of the year. Economic forecasts for both regions see considerable slowing of GDP growth over the next 12 months to the 2-4 percent range. Airlines in both regions can expect a continued slowing of growth.

“As the global economic downturn reshapes the world’s financial industry, policy makers must also understand that change is needed in air transport,” said Bisignani. "Unlike the finance industry, airlines are not asking for handouts. Commercial freedom, efficiency and a fair treatment in taxes are needed.”

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