The airline industry on Thursday reported an "unprecedented and shocking" plunge in global air cargo traffic. The International Air Transport Association said traffic volumes fell 22.6 per cent year-on-year in December. Air freight accounts for 35 per cent of the value of goods traded internationally.
Giovanni Bisignani, IATA director-general, said, "There is no clearer description of the slowdown in world trade. Even in September 2001 [after the terror attacks in the US] when much of the global fleet was grounded, the decline was only 13.9 per cent."
International passenger traffic dropped 4.6 per cent in December. Iata said the fall was less dramatic than in cargo as volumes had been supported by year-end leisure travel that had been booked in advance.
However, Airlines are still striving to reduce capacity to match demand. Capacity was reduced 1.5 per cent year-on-year in December, resulting in airlines filling 73.8 per cent of available seats, still down from 76.2 per cent a year ago. "Until this comes into balance, even the sharp fall in fuel prices cannot save the industry from drowning in red ink," said Bisignani.
British Airways warned this week that it expected an operating loss of about £150m ($215m) in the financial year to the end of March. The announcement came shortly after Air France-KLM, the largest European carrier, disclosed a loss of about €200m ($260m) in the quarter up to December.
Fare levels were also under attack, Bisignani said. Premium passenger traffic, the segment in which most network carriers generate the bulk of their profits, had dropped sharply. The number of premium tickets issued globally fell 11.5 per cent in November.
For the full year of 2008, IATA said international air cargo traffic dropped 4 per cent. Passenger volumes rose 1.6 per cent, compared with 7.4 per cent in 2007.
Bisignani said, "2009 is shaping up to be one of the toughest years ever for international aviation. The 22.6 per cent drop in international cargo traffic in December puts us in uncharted territory, and the bottom is nowhere in sight."