Eurocontrol predicts 5% reduction in European flights in 2009 - "weak growth" likely in 2009


Airports and air navigation services providers are experiencing slumping levels of aircraft traffic - a situation that will persist for much of 2009, according to EUROCONTROL.

The industry body stated the economic crisis will "take a big bite out of European air traffic in 2009", with a predicted 5% reduction in flights in 2009. Over the coming year, reductions in the number of flights will continue across the board, with some countries, such as France, Italy, Spain, Germany and Sweden, set to be particularly affected.

Full service carriers struggling

The prediction comes as IATA released its revised financial and traffic forecasts for 2009, in which European carriers are expected to lose USD1 billion at the net level in 2009. IATA stated a forecast 2.9% fall in the continent's GDP is expected to result in a drop in demand of 6.5%. Capacity cuts by European carriers of 5.3% will not keep pace with the fall in demand, driving yields and profitability down.

EUROCONTROL stated the weak trans-Atlantic traffic caused by the economic and financial crisis has "wiped out any benefits of the EU-US open skies agreement which came into effect in Apr-2008".

LCCs shrinking for first time in 15 years

According to the EUROCONTROL forecast, the decline in traffic is affecting all sectors, including the previously fast-growing LCC segment. In Nov-2008, the LCC segment saw its first year-on-year decline in flight numbers in 15 years and in Feb-2009, the LCC segment provided 5% fewer flights than Feb-2008 (even allowing for the leap year).

EUROCONTROL stated that recent migration flows within Europe, which had brought an increase in air travel, now appear to be reversing.

Business aviation collapsing

Flight activity in the business aviation market collapsed by 21% in Feb-2009 year-on-year.

Outlook remains weak

EUROCONTROL's Head of Forecasting, David March, stated, "as passengers look for cheaper ticket options, yields are falling and load factors remain weak despite airlines cutting capacity in the winter". He concluded, "all of these factors suggest that this decrease will not be short-lived and the recovery in traffic growth is not expected before the end of 2009 with, at best, weak growth in 2010."

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