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 per cent with an average load factor of 75.6 per cent. Freight showed a full-year decline of 10.1 per cent with an average load factor of 49.1 per cent.

“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 per cent in December 2009 while freight capacity grew 0.6 per cent above December 2008 levels. Yields have started to improve with tighter supply-demand conditions in recent months, but they remained 5-10 per cent 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 $5.6 billion in 2010,” said Bisignani.

Seasonally adjusted demand figures for December compared to November 2009 indicate a 1.6 per cent rise in passenger traffic while freight remained basically flat with a 0.2 per cent decline.

International passenger demand

December 2009 passenger demand recorded a 4.5 per cent improvement compared to December 2008, with a load factor of 77.6 per cent. While this is an 8.4 per cent demand improvement from the February 2009 low point, it is still 3.4 per cent below the early 2008 peak.

Carriers in Asia-Pacific, Europe and North America recorded year-on-year declines in passenger demand of 5.6 per cent, 5.0 per cent and 5.6 per cent respectively in 2009.

Asia-Pacific carriers stand out as benefiting most from the year-end upturn with an 8.0 per cent year-on-year improvement in December. This reflects their 35 per cent contribution to the year-end rise boosted by the significant economic upturn in the region.

By contrast, European carriers saw a 1.2 per cent decline and North American carriers declined by 0.4 per cent. While both North American and European carriers saw demand improvements in the first half of the year, the second half was basically flat.

Latin American carriers recorded 7.1 per cent growth in December. Full-year traffic growth was constrained to 0.3 per cent 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 per cent in 2009 primarily on an exceptionally weak first half. Their year ended with December demand at 3.1 per cent above previous year levels.

International freight demand

December 2009 freight demand showed a 24.4 per cent improvement on December 2008 with a load factor of 54.1 per cent. 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 per cent 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 per cent of the increase in international air freight markets over the past 12 months—outperforming their 45 per cent market share. Despite this improvement, Asia-Pacific carriers’ freight volumes remain 8 per cent below peak levels.

European carriers remain 20 per cent 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 per cent and 21 per cent 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,” continued Bisignan.

“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.”

“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 $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,” Bisignani concluded. – TradeArabia News Service