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Global aviation industry "now shrinking by all measures" - IATA

6-Jan-2009
IATA Chief Economist, Brian Pearce
IATA Chief Economist, Brian Pearce
  • International passenger traffic fell 4.6% in Nov-08;
  • Airline industry can expect deep losses in 4Q08: IATA;
  • Asia Pacific carriers face the most difficult operating environment, with a 9.7% decline in RPKs in Nov-08;
  • "2008 gloom will carry over into the new year - improving efficiency everywhere will be theme for 2009" - IATA.

The International Air Transport Association (IATA) stated that the worldwide industry is "now shrinking by all measures", as Nov-08 traffic data showed a 4.6% drop in international passenger traffic and a 13.5% drop in international cargo. International capacity dropped by 1.0%, while load factors fell 3 percentage points to 72.7%.

 

IATA international passenger traffic (RPK) growth (% year-on-year) by region: Nov-08 vs YTD 11 months

IATA's Director General & CEO, Giovanni Bisignani, stated the airline industry can expect deep losses in the fourth quarter of 2008, with no region spared by the traffic and revenue slowdown.

IATA international passenger traffic (RPKs) growth (% change year-on-year): Dec-07 to Nov-08

According to IATA, Asia Pacific carriers face the most difficult operating environment, with a 9.7% decline in passenger traffic (RPKs) in Nov-08, following a 6.1% contraction in Oct-08. The region also had the most aggressive capacity cuts at -5.1%. While Chinese domestic traffic rebounded after the Olympics, travel to and from international markets continues to decline, "reflecting the weakness in both global trade and consumer confidence", according to IATA.

Asia Pacific vs Industry international passenger traffic (RPKs) growth (% change year-on-year): Dec-07 to Nov-08

Asia Pacific vs Industry international passenger capacity (ASKs) growth (% change year-on-year): Dec-07 to Nov-08

Asia Pacific vs Industry international passenger load factor: Dec-07 to Nov-08

European carriers saw international traffic drop by 3.4% as all the region's major markets (intra-Europe, North Atlantic, and Asia) slumped.

Europe vs Industry international passenger traffic (RPKs) growth (% change year-on-year): Dec-07 to Nov-08

Europe vs Industry international passenger capacity (ASKs) growth (% change year-on-year): Dec-07 to Nov-08

Europe vs Industry international passenger load factor: Dec-07 to Nov-08

North American carriers saw international traffic decline by 4.8% - the second largest drop among the regions. Until Aug-08, the region's carriers had been shifting capacity to international markets. But with the near collapse of the investment banking sector and consequent reductions in business travel, North Atlantic travel slumped and carriers have started to cut international capacity with a 0.8% drop in Nov-08 (following 0.4% growth in Oct-08).

Smaller emerging markets fared better. African carriers saw traffic decline by 1.6%. This is a considerable improvement from the 12.9% drop in October, resulting from stronger intra-African traffic. Middle Eastern carriers saw traffic increase by 5.6%. This is up from 3.5% growth in Oct-08, "but represents a step-change from the double-digit expansion that characterised growth prior to the current financial crisis", according to the industry body.

Latin American carriers saw a slight decline in growth to 3.3% (compared to 4.5% growth in October), buoyed by the region's positive, albeit slower, economic growth.

Mr Bisignani concluded, "with no end in sight for the worsening global economy, the 2008 gloom will carry over into the new year. Relief in the oil price has been outstripped by the falls in demand and capacity cuts are not keeping pace. The industry is back in intensive care. Improving efficiency everywhere will be theme for 2009".


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