Worst demand decline in history: IATA

IATA                 AVIATION

Global - The aviation sector saw the largest ever post-war demand decline in 2009 but the worst is behind us, said the International Air Transport Association (IATA).

December and full-year 2009 demand statistics showed freight demand contracting some 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," said IATA director general and CEO Giovanni Bisignani. "We have permanently lost 2.5 years of growth in passenger markets and 3.5 years of growth in the freight business."

Passenger demand for the year slipped 3.5% with an average load factor of 75.6%.

December 2009 freight demand registered a 24.4% improvement on the year before with a load factor of 54.1%. The improvement, however, is exaggerated by the exceptionally weak performance in December 2008, which was the low point on the cycle, IATA said. 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," IATA said.

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.

"The industry starts 2010 with some enormous challenges. The worst is behind us, but it is not time to celebrate," Bisignani said. "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."

"We also face a renewed challenge on security as a result of the events of 25 December 2009. The approach of the Obama administration is encouraging with Department of Homeland Security Secretary Janet Napolitano visiting IATA's offices in Geneva to engage industry to find solutions. We agreed that governments and industry must cooperate and we are preparing for a meeting in the coming weeks to follow-up on our recommendations which focused on finding more efficient ways to implement intelligence-driven and risk-based security measures," said Bisignani.

"Governments and industry are aligned in the priority that we place on security. But the cost of security is also an issue. Globally, airlines spend US$5.9 billion a year on what are essentially measures concerned with national security. This is the responsibility of governments, and they should be picking up the bill," said Bisignani.

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