Passenger Demand Falls for IATA Airlines

The International Air Transport Association (IATA) released international traffic data for April, showing a 3.1 percent decline in passenger demand and a 21.7 percent fall in cargo demand compared to April 2008. The average passenger load factor stood at 74.4 percent, IATA reports.

“While April’s 3.1 percent passenger demand drop was a clear improvement compared to the -11.1 percent fall in March, this improvement should be viewed with caution," IATA said. "Easter holidays, which fell in the month of April, positively skews the data by at least 2 percent. Traffic gains were at the expense of yields in most regions. And preliminary data for May suggests a renewed double digit decline, at least for European airlines.”

Freight demand appears to have found a solid floor with a fifth consecutive month at more than 20 percent below previous year levels.

“We are not out of the woods yet,” said Giovanni Bisignani, IATA’s director general and CEO. “The demand improvements that we saw in April are welcome. But the 3.1 percent decline in passenger demand still outstripped the 2.5 percent cutback in capacity. There is no improvement in revenues as yields continue to fall. And freight remains at shockingly low levels. The worst may be over. However, we have not yet seen any signs that recovery is imminent.”

IATA said acceleration of fare discounting saw demand increase on North Atlantic routes. North American carriers, who experienced a 13.4 percent drop in demand in March, saw this reduced to -4.2 percent in April. The capacity adjustment of -4 percent much more closely matched the fall in demand than in March when there was a 7.7 gap of points.

“With each day of the recession, the challenges for the air transport industry are mounting” said Bisignani. "Flexibility has never been more important. But there is not enough of it. Airlines remain constrained by old rules that restrict basic commercial freedoms such as access to markets and capital. Much of the cost base remains out of our control - from volatile fuel prices to monopoly infrastructure charges. And many governments simply don’t understand the need for urgent change. We need a change in mindset. To manage through this ongoing crisis, every player in the air transport value chain must be prepared to drive change.”

The 65th IATA Annual General Meeting and World Air Transport Summit will take place in Kuala Lumpur, Malaysia from June 7-9.

Visit www.iata.org.

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