Demand statistics for international scheduled air traffic showed the industry ended 2009 with the largest ever post-war decline, according to the International Air Transport Association (IATA). Passenger demand for the full year was down 3.5% with an average load factor of 75.6%. Freight showed a full-year decline of 10.1% with an average load factor of 49.1%.
“In terms of demand, 2009 goes into the history books as the worst year the industry has ever seen,” says Giovanni Bisignani, IATA’s director general and CEO. “We have permanently lost 2.5 years of growth in passenger markets and 3.5 years of growth in the freight business.”
International passenger capacity fell 0.7% in December 2009 while freight capacity grew 0.6% above December 2008 levels. Yields have started to improve with tighter supply-demand conditions in recent months, but they remained 5-10% down on 2008 levels.
“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,” says Bisignani.
Seasonally adjusted demand figures for December compared to November 2009 indicate a 1.6% rise in passenger traffic while freight remained basically flat with a 0.2% decline.
December 2009 freight demand showed a 24.4% improvement on December 2008 with a load factor of 54.1%. This improvement is exaggerated by the exceptionally weak performance in December 2008, which was the low point in the cycle. Freight demand is still 9% lower than the peak in early 2008. Optimism is returning to the industry as purchasing managers survey indicators reached a 44-month high in December pointing towards increased freight volumes in the coming months.
Asia-Pacific carriers accounted for over 60% of the increase in international air freight markets over the past 12 months—outperforming their 45% market share. Despite this improvement, Asia-Pacific carriers’ freight volumes remain 8% below peak levels.
European carriers remain 20% below 2008 peak levels reflecting the glacial pace of economic recovery in Europe compared to Asia-Pacific.
Middle East carriers and Latin American carriers are smaller market participants, but ended the year better than peak levels by 7% and 21% respectively.
“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,” says Bisignani.