Air travel splutters in worst year since the war

By Angela Jameson, Industrial Correspondent The Times, 27th January 2010

Demand for air travel collapsed in 2009, contributing to the worst performance in the post-war history of the industry.

Passenger numbers fell by 3.5 per cent, according to the International Air Transport Association (IATA), reversing years of steady passenger growth.

Freight traffic fared even worse performance — down 10.1 per cent in the year — as the global recession took its toll.

“In terms of demand, 2009 goes into the history books as the worst year the industry has ever seen," Giovanni Bisignani, director-general and chief executive officer of IATA, said.

"We have permanently lost 2.5 years of growth in passenger markets and 3.5 years of growth in the freight business.”

IATA is warning that the aviation sector will face a tough 2010 as it tries to make up for the lost demand of 2009 and handles strict new security measures.

“The industry starts 2010 with some enormous challenges," Mr Bisignani said.

"The worst is behind us, but it is not time to celebrate.”

IATA has forecast that airlines will lose $5.6 billion (£3.5 billion) on a net basis this year after losing $11 billion in 2009.

The industry’s best performers were among the Middle Eastern carriers, which generated the fastest growth in passenger traffic, up 11.2 per cent on the whole year.

By Angela Jameson, Industrial Correspondent www.timesonline.co.uk 27th January 2010

Middle Eastern carriers have been taking a larger share of long-haul connecting traffic over their hubs, taking market share away from prominent Western carriers, such as British Airways and Air France.

Airlines in Asia-Pacific, Europe and North America recorded year-on-year declines in passenger demand of 5.6 per cent, 5 per cent and 5.6 per cent respectively in 2009.

While both North American and European carriers saw demand improvements in the first half of the year, the second half was basically flat.

Signs that some progress would be made this year came last month, when air freight traffic jumped by almost a quarter, showing that economic recovery is picking up steam.

But this year-on-year strength was exaggerated by an unusually weak December 2008, the low-point in the cycle.

Passenger demand also rose 4.5 per cent in December, with the average load factor of aircraft — the average number of available seats filled — at 77.6 per cent.

However, Mr Bisignani said that airlines would see only a slow improvement to revenues, as carriers cut the price of seats to encourage demand.

“Profitability will be even slower to recover,” he said.

Last year was marked by the bankruptcy throes of Japan Airlines, Asia’s biggest carrier, which culminated this month.

In the UK, Globespan, the Scottish carrier, also went bust, leaving many holidaymakers stranded.