Cargo growth hits reverse

THE International Air Transport Association (IATA) released international traffic data for June that showed a continued slowing of demand growth for air transport. For the first time in three years cargo contracted (by 0.8 per cent) compared to June 2007. Passenger demand growth fell to 3.8 per cent, the lowest level since 2003. Passenger load factors dropped to 77.6 per cent, 1.2 percentage points below the 78.8 per cent recorded for June 2007.

“The global economic turbulence clearly shows in the 0.8 per cent drop in freight volumes compared to last year. Although the passenger demand grew by 3.8 per cent, this is the slowest growth that we have seen since the industry was hit by the SARS crisis in 2003. With consumer and business confidence falling and sky-high oil prices, the situation will get a lot worse,” said Giovanni Bisignani, director general and chief executive officer of IATA.

Cargo:

International freight traffic declined -0.8 per cent in June. This is the first decline seen since May 2005 and follows several months of falling manufacturing sector confidence indicators.

Asia Pacific airlines led the contraction with a -4.8 per cent year-on-year decline for June traffic.

Latin American airlines recorded the largest contraction (12.7 per cent) as the region’s cargo sector continues to re-structure its capacity.

European carriers saw freight demand growth fall to 0.7 per cent in June from 1.4 per cent in May.

North American carriers also saw freight demand growth slow to 4.0 per cent in June from 4.6 per cent in May.

Middle Eastern carriers delivered the strongest performance with 12.2 per cent growth (up slightly from the 10.7 per cent recorded in May).

African airlines recorded a -1.9 per cent year-on-year decline in June.

“The airline sector is in trouble. Losses this year could reach US$6.1 billion, more than wiping out the $5.6 billion that airlines made in 2007. Falling demand and rising costs are re-shaping the industry. To survive the crisis, urgent action is needed. Airports and air navigation service providers, must come to the table with efficiencies that deliver cost savings. Labour must understand that efficiency is the only path to job security. And governments must stop crazy taxation and give airlines the freedom to merge and consolidate where it makes business sense,” said Bisignani.

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