Home » Aviation » IATA: 2009 worst year for airlines in half a century

THE airline industry suffered its worst beating in almost half a century after posting all-time lows in passenger and cargo volume in 2009.

According to the latest data from the International Air Transport Association (IATA), cargo volume for 2009 declined 10.1% with average load factor at 49.1%. Passage traffic, on the other hand, dipped 3.5% with average load factor at 75.6%.

However, IATA sees light at the end of the tunnel after a 0.6% surge in cargo traffic and only a 0.7% loss in passenger capacity for December.

Yields also started to improve with tighter supply-demand conditions in recent months, but they remained 5-10% down on 2008 levels.

“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 IATA director general Giovanni Bisignani in a report released middle of last week.

“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.

“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.”

Asia-Pacific carriers accounted for over 60% of the increase in international air freight markets over the past 12 months-outperforming their 45% market share. Despite this improvement, Asia-Pacific carriers’ freight volumes remain 8% below peak levels.

European carriers likewise remained 20% below 2008 peak levels, reflecting the glacial pace of economic recovery in Europe compared to Asia-Pacific.

Middle East and Latin American carriers are smaller market participants, but ended the year better than peak levels by 7% and 21%, respectively.

In the passage business, carriers in Asia-Pacific, Europe and North America recorded year-on-year declines in passenger demand of 5.6%, 5% and 5.6%, respectively, in 2009.

Asia-Pacific carriers stand out as benefiting most from the year-end upturn with an 8% year-on-year improvement in December. This reflects their 35% contribution to the year-end rise boosted by the significant economic upturn in the region.

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

Middle Eastern carriers generated the fastest growth in passenger traffic at the end of the year with a 19.1% increase in December and 11.2% growth for the entire year. These gains result from Middle Eastern carriers taking a larger share of long-haul connecting traffic over their hubs.

Latin American carriers recorded 7.1% growth in December. Full-year traffic growth was constrained to 0.3% due to the impact of nfluenza A(H1N1) fears during the second and third quarters.

Africa’s carriers experienced a sharp decline of 6.8% in 2009 primarily on an exceptionally weak first half. Their year ended with December demand at 3.1% above previous year levels.

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