But International Association Sees Encouraging Year-End
Improvements
The International Air Transport Association (IATA) reported
December and full-year 2009 demand statistics for international
scheduled air traffic that showed the industry ending 2009 with the
largest ever post-war decline. Passenger demand for the full year
was down 3.5% with an average load factor of 75.6%. Freight showed
a full-year decline of 10.1% with an average load factor of
49.1%.
“In terms of demand, 2009 goes into the history books as
the worst year the industry has ever seen. We have permanently lost
2.5 years of growth in passenger markets and 3.5 years of growth in
the freight business,” said Giovanni Bisignani, IATA’s
Director General and CEO.
International passenger capacity fell 0.7% in December 2009
while freight capacity grew 0.6% above December 2008 levels. Yields
have started to improve with tighter supply-demand conditions in
recent months, but they remained 5-10% down on 2008 levels.
“Revenue improvements will be at a much slower pace than the
demand growth that we are starting to see. Profitability will be
even slower to recover and airlines will lose an expected US$5.6
billion in 2010,” said Bisignani.
Seasonally adjusted demand figures for December compared to
November 2009 indicate a 1.6% rise in passenger traffic while
freight remained basically flat with a 0.2% decline.
One of the bright spot was that December 2009 passenger demand
recorded a 4.5% improvement compared to December 2008, with a load
factor of 77.6%. While this is an 8.4% demand improvement from the
February 2009 low point, it is still 3.4% below the early 2008
peak.
- Carriers in Asia-Pacific, Europe and North America recorded
year-on-year declines in passenger demand of 5.6%, 5.0% and 5.6%
respectively in 2009. Asia-Pacific carriers stand out as
benefitting most from the year-end upturn with an 8.0% year-on-year
improvement in December. This reflects their 35% contribution to
the year-end rise boosted by the significant economic upturn in the
region. By contrast, European carriers saw a 1.2% decline and North
American carriers declined by 0.4%. While both North American and
European carriers saw demand improvements in the first half of the
year, the second half was basically flat.
- Middle Eastern carriers generated the fastest growth in
passenger traffic at the end of the year with a 19.1% increase in
December (and 11.2% growth for the entire year). These gains result
from Middle Eastern carriers taking a larger share of long-haul
connecting traffic over their hubs.
- Latin American carriers recorded 7.1% growth in December.
Full-year traffic growth was constrained to 0.3% due to the impact
of Influenza A(H1N1) fears during the second and third
quarters.
- Africa’s carriers experienced a sharp decline of 6.8% in
2009 primarily on an exceptionally weak first half. Their year
ended with December demand at 3.1% above previous year levels.
December 2009 freight demand showed a 24.4% improvement on
December 2008 with a load factor of 54.1%. This improvement is
exaggerated by the exceptionally weak performance in December 2008
which was the low point on the cycle. Freight demand is still 9%
lower than the peak in early 2008. Optimism is returning to the
industry as purchasing managers survey indicators reached a
44-month high in December pointing towards increased freight
volumes in the coming months.
- Asia-Pacific carriers accounted for over 60% of the increase in
international air freight markets over the past 12
months—outperforming their 45% market share. Despite this
improvement, Asia-Pacific carriers’ freight volumes remain 8%
below peak levels.
- European carriers remain 20% below 2008 peak levels reflecting
the glacial pace of economic recovery in Europe compared to
Asia-Pacific.
- Middle East carriers and Latin American carriers are smaller
market participants, but ended the year better than peak levels by
7% and 21% respectively.
“The industry starts 2010 with some enormous challenges.
The worst is behind us, but it is not time to celebrate. Adjusting
to 2.5-3.5 years of lost growth means that airlines face another
Spartan year focused on matching capacity carefully to demand and
controlling costs,” said Bisignani.
“We also face a renewed challenge on security as a result
of the events of 25 December 2009. The approach of the Obama
administration is encouraging with Department of Homeland Security
Secretary Janet Napolitano visiting IATA’s offices in Geneva
to engage industry to find solutions. We agreed that governments
and industry must cooperate and we are preparing for a meeting in
the coming weeks to follow-up on our recommendations which focused
on finding more efficient ways to implement intelligence-driven and
risk-based security measures,” said Bisignani.
“Governments and industry are aligned in the priority that
we place on security. But the cost of security is also an issue.
Globally, airlines spend US$5.9 billion a year on what are
essentially measures concerned with national security. This is the
responsibility of governments, and they should be picking up the
bill,” said Bisignani.