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US Hardest Hit

OAG reports 7% Drop in global airline capacity in 4th quarter

eTN  Aug 05, 2008

WASHINGTON, DC (August 5, 2008) - The world's airlines will offer 59.7 million fewer seats in the 4th quarter of 2008 than they did a year ago, according to OAG (Official Airline Guide, in its 10 year view of the global aviation industry. The latest figures from OAG's consolidated database reveal a 7% drop both in the number of flights and in seat capacity for October, November and December 2008 compared with the same period last year. The US domestic market will account for just under 20 million of that figure, or 33% of the global decline in capacity, in what could potentially be the most widespread crisis to hit the aviation industry in recent memory.

The OAG analysis takes into account all future schedules filed by the airlines to date, to provide a comprehensive snapshot of planned airline activity for October to December 2008 with comparisons tracking back 10 years.

In the 4th quarter of 2007, seat supply in intra-Asia markets outpaced the US for the first time. However, Asia is currently showing a 13% decrease in capacity for 4th quarter 2008 (equivalent to a 3-year setback in growth) although this may not be quite as severe as current figures show, as a number of Chinese carriers have not yet filed their full winter schedules.

Steve Casley, chief operating officer of OAG, said, "The data speaks for itself. It took a good three years for the industry to recover from the downturn in 2001 when it had a 5% drop in capacity and a 7% drop in flights. Steady annual growth since 2002 looks set to plummet in the fourth quarter this year with an unprecedented global decline of 7%."

"Commercial aviation marches in lock-step with the global economy, closely reflecting growth and declines in GDP, with on average a steady 3-4% growth year over year," continued Casley. "In the last 10 years this steady growth has been interrupted twice: first, by the meltdown of the global economy in 2001 following the burst of the Internet bubble, which was compounded by a year of crises with the traumatic events of 9/11, the Gulf War and the SARS epidemic within Asia; and second - on the immediate horizon - by the extraordinary impact that the rising cost of oil is having on the global economy. We tend to focus so much attention on the growth of Asian markets, but the projected 13% drop in Asian seat capacity is a significant metric that may have wider impact.

"From OAG's statistics, it looks quite possible that we may be facing a far more severe global downturn than we have experienced before. The industry's resilience will be pushed to its limits in the coming months, with carriers, airports and passengers alike all waiting and watching for a glimmer of light at the end of the tunnel."

OAG reports 7% Drop in global airline capacity in 4th quarter

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