Airlines suffered record drop in traffic in 2009: IATA

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The Independent Travel

World airlines suffered their biggest traffic decline since 1945 last year, making 2009 the "worst year the industry has ever seen," and can expect only a slow recovery in 2010, the International Air Transport Association said Wednesday.

Passenger demand fell 3.5 percent while in the freight sector demand was down 10.1 percent.

"Full-year 2009 demand statistics for international scheduled air traffic ... showed the industry ending 2009 with the largest ever post-war decline," IATA said in a statement.

"In terms of demand, 2009 goes into the history books as the worst year the industry has ever seen," said Giovanni Bisignani, director general of an association that groups the world's biggest airlines' association.

"We have permanently lost 2.5 years of growth in passenger markets and 3.5 years of growth in the freight business," he added.

Bisignani warned that while the worst appeared to be over with the recovery in the global economic climate, airlines would have to keep their costs reined in during a "Spartan year" in 2010.

Passenger traffic improved in the final months of 2009, after a slump triggered by the financial and economic crisis.

In December, passenger traffic increased by 4.5 percent in December compared to the same month the previous year, and by 1.6 percent over November, latest IATA data showed.

While airlines had continued to cut capacity and flights, yields were still five to 10 percent below 2008 levels by the end of last year.

IATA nevertheless predicted a slow recovery for cash-strapped carriers.

"Revenue improvements will be at a much slower pace than the demand growth that we are starting to see," said Bisignani.

"Profitability will be even slower to recover and airlines will lose an expected 5.6 billion dollars in 2010," he added.

The industry association warned last month that airlines faced another turbulent year after they racked up an estimated 11 billion dollars in losses in an "Annus Horribilis" in 2009 despite a recovery in passenger traffic.

"The industry starts 2010 with some enormous challenges. The worst is behind us, but it is not time to celebrate," Bisignani said on Wednesday.

"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," he added.

IATA represents some 230 carriers that account for more than 90 percent of scheduled air traffic, but does not include many of the major budget airlines.

Its members in Europe, the Asia-Pacific region, and North America recorded year-on-year declines of 5.0 to 5.6 percent in 2009.

But Asian airlines staged a stronger recovery in demand last month, at nearly twice the global average, while travel on European and North American carriers stagnated or slipped.

In the Middle East, airlines staged the fastest recovery with a 19.1 percent increase, taking advantage of the their central position between Europe, Africa and Asia to expand their share of connecting traffic through local hubs.

Passenger travel on Latin American airlines grew by 7.1 percent in December after a largely stagnant year sapped by swine flu pandemic fears in second and third quarters.

Pierre Boucheny, head of research in Paris at Kepler Capital Markets, said there was still no clear revival in fortunes for airlines.

"Ticket prices have been the most negative point for carriers in 2009," he told AFP.

"Companies have tightened their belts in many ways - they were refusing for example to pay business class fares for their executives," Boucheny added.

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