Global airline industry still in the red: IATA
abs-cbnNEWS.com | 10/30/2009 3:29 PM
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Demand for international air travel may have started to improve year-on-year in September, but the slump in the global airline industry has yet to end, the International Air Transport Association (IATA) said.
In a statement, the industry group said passenger demand increased 0.3%, while cargo demand was 5.4% below September 2008 levels. On the other hand, load factors for passenger and cargo have returned to pre-crisis levels of 77.1% and 50.8%, respectively.
Given these figures, one may think that the aviation industry is starting to show signs of recovery from the global economic crisis. But according to IATA, these year-on-year improvements in demand are "misleading."
IATA said better results were seen in September 2009 since it was compared to "an exceptionally weak September 2008," when passenger and cargo traffic fell sharply by 2.9% and 7.7%, respectively.
But when compared to the previous month, passenger volume in September dropped 0.3% while cargo demand posted a 1.4% decline.
“It is far too early to call this a recovery. The worst may be over in terms of the fall in demand, but yields continue to be a disaster and costs are rising. The airline industry remains firmly in the red with a fragile business environment,” IATA Director General and Chief Executive Officer Giovanni Bisignani said.
IATA said airlines continue to carefully manage capacity as passenger capacity remained unchanged throughout the year. Cargo capacity, meanwhile, only edged up slightly in the last 2 months.
As airlines adjust capacity to match demand, IATA said aircraft are flying fewer hours, raising non-fuel unit costs. At the same time, the group cited rising oil prices.
Passenger demand
Among the major regions, carriers in Asia Pacific recorded the most significant improvement to 2.1% in September from -1.6% in the previous month.
"Government stimulus packages in the major economies are driving production increases, the region's banking system is relatively strong, and the region's consumers are not as burdened by debt as those in Europe and the US," IATA said.
Middle Eastern and Latin American carriers experienced a jump in demand in September at 18.2% and 3.4%, respectively. African carriers, meanwhile, saw a marginal improvement to -4.2% from -4.9%.
"While African economies have been relatively resilient in the recession, the region's carriers continue to struggle to maintain market share," IATA said.
By contrast, IATA said European carriers saw a deterioration in demand to -4.2% in September from -2.8% in August.
"This partly reflects a loss of market share by network carriers on short-haul routes to low-cost carriers. More significantly, there has been a deterioration in demand on long-haul routes," IATA said.
Meanwhile, North American carriers saw demand largely unchanged at -2.4% in September from -2.5% in the previous month, due to a dip in consumer and business confidence.
Cargo demand
IATA said Middle Eastern carriers showed the strongest performance in terms of cargo demand as it posted a 3.6% rise in September.
Latin American carriers also reported a growth of 1.8%, but the figure was a decline from the 3.9% recorded in the previous month.
Carriers in Asia Pacific, Europe, and North America showed improvements in cargo operations over its August performance, but remained at negative territory at -3.1%, -13%, and -5%, respectively. IATA said improvements were broadly in line with improved economic activity in each region.
Cargo operations of African carriers, meanwhile, declined further to -6.9% in September from -5.1 in the previous month.
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