2009 worst year on record

International Air Transport Association reported 2009 statistics for international scheduled air traffic represented the largest ever post-war decline. Passenger demand for the full year was down 3.5% with an average load factor of 75.6%.

“In terms of demand, 2009 goes into the history books as the worst year the industry has ever. 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 and CEO, Giovanni Bisignani.

In the last month of the year, international passenger capacity fell 0.7%. Yields have started to improve with tighter supply-demand conditions in recent months, but they remained 5-10% down on 2008 levels. Seasonally adjusted demand figures for December compared to November 2009 indicate a 1.6% rise in passenger traffic.

“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 US$5.6 billion in 2010,” said Mr Bisignani.

Passenger demand in December recorded a 4.5% improvement compared to December 2008, with a load factor of 77.6%.

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 benefitting 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 by 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 while full-year traffic growth was constrained to 0.3%. Meanwhile, 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.

“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,” said Mr Bisignani.

Security has come back as an issue in the aviation industry that would add huge cost.

“Governments and industry are aligned in the priority that we place on security. But the cost of security is also an issue. Globally, airlines spend US$5.9 billion a year on what are essentially measures concerned with national security. This is the responsibility of governments, and they should be picking up the bill,” said Mr Bisignani.