Airline crisis deepens as passengers down globally
[October 27th 2008]
Airline passenger number across the world fell by 2.9% in September, the worst fall since the SARS crisis in 2003.
Figures released by the International Air Transport Association (IATA) also show that occupancy levels - or load factors - on planes fell by 4.4% to just 74.8% in September.
The deterioration in traffic is alarmingly fast-paced and widespread. We have not seen such a decline in passenger traffic since SARS in 2003, comments IATA director general and CEO, Giovanni Bisignani.
Even the good news that the oil price has fallen to half its July peak is not enough to offset the impact of the drop in demand. At this rate, losses may be even deeper than our forecast US$5.2 billion for this year, adds Bisignani.
In Europe airline passenger traffic was down 0.5% as the region heads for recession. And in North America a 5% growth in international traffic turned into a fall of 0.9%. But the most alarming fall in passenger numbers was in Africa, down by 7.8%.
The fall in international passenger traffic was limited to airlines in the Asia Pacific region until August. A sharp downturn in world trade saw airlines in the region experience another fall in passenger numbers of 6.8% in September.
Middle Eastern airlines were also hard hit as after years of double digit growth they saw passenger numbers drop by 2.8%. The only region reporting a growth in passenger numbers in September was Latin America. But here the growth was only 1.7%, shockingly down says IATA from the growth of 11.9% experienced in August.
The industry crisis is deepening - along with the crisis in the global economy. Airlines, like all other businesses, are facing enormous challenges. But unlike other companies, they are denied some basic commercial freedoms - access to markets and to global capital - that could help them manage their business in this difficult time, says Bisignani.
Airlines are not asking for handouts. But todays crisis highlights the need for airlines to be able to run their businesses like normal global businesses, Bisignani said in Istanbul on the eve of the Agenda for Freedom Summit.
At the Summit 15 progressive governments will discuss the future regulatory structure of international air transport. We are not asking for anything other than the basic freedoms to do business that other industries take for granted, Bisignani stressed.
Written by: Nick Purdom
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