Airlines hit by economy as traffic falls
[October 23rd 2008]
Figures from the Association of European Airlines reveal that airline passenger numbers have fallen due to essentially economic factors for the first time since the early 1980s.
The AEA says that passenger numbers reached a tipping point in late summer when a marginal growth of 1.6% in August was followed by a decrease of 1.1% in September. Although there have been decreases in previous months, since the early 80s these have always been triggered by external shocks such as 9/11, SARS and the Gulf Wars the AEA suggests.
In terms of response to purely economic stimuli, these figures are the weakest our industry has seen for 25 years, and with the major European economies still in transition to a recessionary state they cannot be expected to recover in the immediate future, comments AEA secretary general Ulrich Schulte-Strathaus.
The toxic combination of economic slowdown, a steep decline in business and consumer confidence, and fuel price-driven inflation which is hitting both the airlines and their customers is challenging the very structure of the industry, he claims.
The sector of the airline industry which has been hardest hit appears to be domestic flights perhaps because of competition from rail, and because people have simply chosen not to travel. Figures from the 35 airlines which are members of the AEA show domestic traffic fell by 7.9% in August and 12.4% in September.
The three largest sectors cross-border Europe, North Atlantic and Far East flights increased marginally in August by 1.4%, 0.9% and 1.5% respectively, but fell by 1.1%, 1.1% and 0.8% in September.
However, there were some positive signs for airlines. Passenger numbers on flights to the South Atlantic were up by 13% in August and 9.5% in September, and the AEA says some buoyancy remained in Middle Eastern markets.
Members of the AEA include many of the largest airlines in Europe such as Aer Lingus, Air France, Alitalia, bmi, British Airways, Iberia, KLM, Lufthansa, Spanair, Swiss, TAP Portugal and Virgin Atlantic. Between them the 35 members carry 380 million passengers a year and operate 2,660 aircraft to 615 destinations in 165 countries.
Written by: Nick Purdom
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