Economic Gloom Continues in January international air freight

26.2.2009   (IATA)

Geneva – The International Air Transport Association (IATA) announced international
scheduled traffic results for January showing a deepening year-on-year demand
slump.

International passenger demand fell by 5.6% in January 2009 compared to the same
month in 2008. It is also a full percentage point worse than the 4.6% year-on-year
drop recorded in December. The January fall in demand is the fifth consecutive
month of contraction.

The 5.6% drop in passenger demand outpaced capacity cuts of 2.0% driving the
load factor to 72.8% – 2.8% below what was recorded for January 2008.

The alarming collapse in cargo markets in December (-22.6%) worsened in January
2009 with a 23.2% year-on-year demand drop. This is the eighth consecutive month
of contraction for freight traffic.

"Alarm bells are ringing everywhere. Every region’s carriers are reporting big
drops in cargo. And, aside from the Middle East carriers, passenger demand is
falling in all regions. The industry is in a global crisis and we have not yet
seen the bottom," said Giovanni Bisignani, IATA’s Director General and CEO.

Passenger

  • Asian carriers led the decline in passenger demand with an 8.4% year-on-year drop in January.
    While this is slightly better than the 9.7% contraction in December, this is positively
    skewed by Chinese New Year which fell at the end of January 2009 (and which was
    in February the year before). Capacity in the region contracted 4.3%. With Japan,
    the region’s largest market for air travel, expected to see its economy contract
    by an unprecedented 5% in 2009, the prospects for traffic in the region remain
    dismal.
  • North American carriers posted the second largest passenger decline at 6.2% led by a decline in Trans-Pacific
    travel. In response, carriers withdrew 2.6% of their international capacity, clawing
    back some of the expansion of 2008.
  • European carriers offset a 5.7% decline in demand with a 3.6% decrease in capacity. Demand decreased
    sharply from the 2.7% fall in December as European economies move into deep recession.
  • Latin American carriers saw a modest decline of 1.4%. Even against a 0.5% increase in capacity, the
    region turned in the highest load factors at 74.9%.
  • African carriers saw the demand decline slow from an average 4.0% in 2008 to 2.6% in January.  
  • The Middle East was the only region with a positive traffic growth of 3.1%. This is far below
    both the double-digit traffic growth in 2008 and the 10.8% expansion in capacity.

Cargo

  • Asia Pacific carriers, representing 43% of the market, led the cargo decline with a 28.1% year-on-year
    drop. This was followed closely by the other major market players: European carriers (-23.0%) and North American carriers (-19.3%).
  • While this may appear to be relatively stabilised compared to the precipitous
    December drop, it is too soon to call a bottom in the air freight market. Manufacturers
    are still shedding inventory and cutting production which is expected to lead
    to further falls in freight volumes.

"The only good news is that fuel prices remain well below last year’s level.
But the drop in demand is much more harmful. The industry is shrinking with revenues
expected to fall by US$35 billion to US$500 billion, delivering a loss of US$2.5
billion this year," said Bisignani.

"Airlines remain in intensive care, but while others ask for government bailouts,
our demands on Governments are much more modest. First, don’t tax us to death
in order to pay for investments in the banking industry. This includes the UK
government’s plans to increase its multi-billion pound Air Passenger Duty and
the Dutch Government’s misguided departure tax," said Bisignani. In 2008, even
as governments delivered tax breaks to stimulate economic growth, the airline
industry took on an additional tax burden of US$6.9 billion.

"Second, give airlines the commercial freedoms that every other business takes
for granted. With the world’s capital markets in disarray, archaic ownership restrictions
are an unnecessary burden that must be lifted. Today’s crisis highlights the need
to change the structure of this hyper-fragmented and fragile industry," said Bisignani,
referring to IATA’s Agenda for Freedom initiative.

View full January traffic results   (copied below though they do not display properly)

Economic Gloom continues in January traffic:

 

Jan 2009 vs. Jan 2008 RPK Growth ASK Growth PLF FTK Growth ATK Growth
Africa -2.6% -0.6% 71.1 -19.8% -2.0%
Asia/Pacific -8.4% -4.3% 73.5 -28.1% -8.9%
Europe -5.7% -3.6% 71.3 -23.0% -5.7%
Latin America -1.4% 0.5% 74.9 -17.2% -0.1%
Middle East 3.1% 10.8% 71.9 -6.1% 7.3%
North America -6.2% -2.6% 74.3 -19.3% -3.6%
Industry -5.6% -2.0% 72.8 -23.2% -4.9%
 

 

2008 vs. 2007

 

RPK Growth

 

ASK Growth

 

PLF

 

FTK Growth

 

ATK Growth

Africa -4.0% -4.2% 70.2 -2.5% -7.4%
Asia/Pacific -1.5% 1.2% 73.9 -6.6% -2.5%
Europe 1.8% 3.8% 76.6 -2.8% 2.9%
Latin America 10.2% 9.2% 74.0 -13.5% 5.7%
Middle East 7.0% 8.6% 74.9 6.3% 8.5%
North America 2.9% 4.3% 79.8 -1.9% 3.4%
Industry 1.6% 3.5% 75.9 -4.0% 1.5%

 

Notes for Editors:

  • IATA (International Air Transport Association) represents some 230 airlines comprising
    93% of scheduled international air traffic.
  • Explanation of measurement terms:  
    • RPK: Revenue Passenger Kilometres measures actual passenger traffic
    • ASK: Available Seat Kilometres measures available passenger capacity  
    • PLF: Passenger Load Factor is % of ASKs used. In comparison of 2007 to 2006,
      PLF indicates point differential between the periods compared  
    • FTK: Freight Tonne Kilometres measures actual freight traffic  
    • ATK: Available Tonne Kilometres measures available total capacity (combined passenger
      and cargo)
  • IATA statistics cover international scheduled air traffic; domestic traffic is
    not included.
  • All figures are provisional and represent total reporting at time of publication
    plus estimates for missing data.
  • International passenger traffic market shares by region in terms of RPK are:
    Europe 32%, Asia Pacific 32.6%, North America 17.5%, Middle East 10.9%, Latin
    America 5.1%, Africa 2.0%
  • International freight traffic market shares by region in terms of FTK are: Asia
    Pacific 43%, Europe 26.3%, North America 17.4%, Middle East 10.1%, Latin America
    2.3%, Africa 0.9%