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Global Aviation Industry

Air travel declines at alarming pace

Nelson Alcantara, editor-in-chief  Nov 03, 2008

The global aviation industry is facing its largest drop in passengers since the outbreak of Severe Acute Respiratory Syndrome (SARS) in 2003, the International Air Transport Association (IATA) has said.

IATA director general Giovanni Bisignani, based on September figures, said: “The deterioration in traffic is alarmingly fast-paced and widespread. We have not seen such a decline in passenger traffic since SARS in 2003. Even the good news that the oil price has fallen to half its July peak is not enough to offset the impact of the drop in demand. At this rate, losses may be even deeper than our forecast US$5.2 billion for this year.”

The Montreal-based airline group said global international traffic results for September show passenger traffic declined 2.9 percent while cargo traffic dropped 7.7 percent compared to the same month in 2007.

The airline group added that international load factors tumbled by 4.4 percentage points from August to 74.8 percent for the month of September.

According to IATA, due to airline bankruptcies, it lost 24 of its 230 members in 2008, and expects the number to rise.

IATA has emphasized that it favors less regulation of international air traffic as the most important factor in staving off further financial calamity in the industry. The association said it is particularly concerned that international air transport is unreasonably restricted by the web of 3,500 bilateral air service agreements which deny market access until specifically agreed and by protectionist ownership rules that preclude airline mergers across borders.

According to IATA, Latin American carriers which saw an increase of 1.7 percent were the only region where passenger traffic didn’t shrink. Latin American growth was down from the 11.9 percent growth in August.

In the Asia Pacific region, IATA said the sharp downturn in world trade disproportionately impacted Asia-Pacific carriers with a 6.8 percent drop in traffic.

Also based on the figures for September, Middle East carriers, after years of double-digit growth, saw passenger traffic turn to a negative 2.8 percent.

According to IATA, however, the biggest losers were African carriers, which posted the largest decline in traffic (-7.8 percent), a continuation of the previous month’s trend.

Air travel declines at alarming pace

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