Economic Gloom Continues in January
Geneva - The International
Air Transport Association (IATA) announced international scheduled
traffic results for January showing a deepening year-on-year demand
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.
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.
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.
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.
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%.
carriers saw the demand decline slow from an average
4.0% in 2008 to 2.6% in January.
- The Middle
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.
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
“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
“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
Notes for editors:
(International Air Transport Association) represents some 230
airlines comprising 93% of scheduled international air traffic.
of measurement terms:
- RPK: Revenue
Passenger Kilometres measures actual passenger traffic
Available Seat Kilometres measures available passenger
Passenger Load Factor is % of ASKs used. In comparison of 2007 to
2006, PLF indicates point differential between the periods
Freight Tonne Kilometres measures actual freight traffic
Available Tonne Kilometres measures available total capacity
(combined passenger and cargo)
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.
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%
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%