Global economic downturn hits airline traffic worldwide

27 February 2009

Global airline traffic, both passenger as well as cargo declined sharply in the month of January as passengers withhold their travel plans and businesses lower their corporate travel policies, said the International Air Transport Association (IATA).

Global airlines are set to post $2.5 billion in losses in 2009 as revenues are likely to shrink by $35 billion to $500 billion, said IATA.

Represents 230 airlines comprising 93 per cent of scheduled international air traffic, IATA said that international scheduled traffic results for January showing a deepening year-on-year demand slump as international passenger demand fell by 5.6 per cent in January 2009 compared to the same month in 2008.
 
The January decline was the fifth consecutive month of contraction and a full percentage point worse than the 4.6 cent year-on-year drop recorded in December.

The 5.6 per cent drop in passenger demand outpaced capacity cuts of 2.0 per cent driving the load factor to 72.8 per cent - 2.8 per cent below what was recorded for January 2008, said IATA.

The world's largest airline by market value, Singapore airlines is fighting with lower travel and cargo demand and has cut flights to some Asian cities and may put future aircraft orders on hold.

The decline was not restricted to passenger traffic only as the cargo markets, which registered a 22.6 per cent drop in December worsened in January 2009 with a 23.2 per cent year-on-year demand drop making it the eighth consecutive month of contraction for freight traffic.