IATA predicts future woes

TRAFFIC results from the International Air Transport Association (IATA) for December and the whole of 2008, show the true extent to the alarming drop in cargo demand.
IATA’s results show a fall of 22.6 per cent for December and four per cent for the whole year; this compared to the 4.3 per cent growth in 2007.

Giovanni Bisignani (right), IATA’s director general and chief executive officer, said: “2009 is shaping up to be one of the toughest years ever for international aviation. [This drop] puts us in unchartered territory and the bottom is nowhere in sight. Keep your seatbelts fastened and prepare for a bumpy ride and a hard landing.”

All regions showed major declines, a collapse in business that matches the 20 to 30 per cent declines in export and import volumes reported across Asia, North America and Europe.

Asia-Pacific carriers, which account for 45 per cent of international cargo, led the December decline with a 26 per cent drop compared to the previous year. Central and South American carriers saw cargo drop 23.7 per cent; North American carriers 22.2 per cent and European carriers 21.2 per cent. Middle Eastern and African carriers saw the shallowest declines, at 9.2 per cent and eight per cent respectively.

“The 22.6 per cent free fall in global cargo is unprecedented and shocking,” Bisignani said. “There is no clearer description of the slowdown in world trade. Even in September 2001, when much of the global fleet was grounded, the decline was only 13.9 per cent.

“Airlines are struggling to match capacity with fast-falling demand. Until this comes into balance, even the sharp fall in fuel prices cannot save the industry from drowning in red ink. Yields are also under attack with a sharp drop in November premium traffic,” he added.

Airlines registered a US$5 billion loss in 2008 but IATA predicts a further five per cent drop in cargo traffic in 2009. IATA has called for major structural changes to the industry. “We don’t want bail-outs,” said Bisignani “but we need to change the ownership rules. Almost every other business has the freedom to access global capital and the ability to merge across borders where it makes sense. To manage in this crisis, airlines need the same management tools.”