Air traffic shows continued downturn

 In the release of the International Air Transport Association (IATA), international freight traffic also saw its third consecutive month of contraction with a 2.7 per cent decline following drops of 1.9 per cent in July and 0.8 per cent in June.

 "Passenger traffic grew by 5.4 per cent in the first half of the year. That slowed to 1.9 per cent in July and 1.3 per cent in August. The contrast between the first half of the year and the last two months is stark," said Giovanni Bisignani, IATA's Director General and CEO.

 "The slowdown has been so sudden that airlines can't adjust capacity quickly enough. While the drop in the oil price is welcome relief on the cost side, fuel remains 30 per cent higher than a year ago. And with traffic growth continuing to decline, the industry is still heading for a US$5.2 billion loss this year."

 Air freight has declined for the past three months, led by Asia Pacific carriers that posted a 6.5 per cent decline in July and a 6.8 per cent decline in August. "Airlines carry 35 per cent by value of the goods traded internationally. The  three-month decline—led by weakness in Asia-Pacific markets—is a clear indication that global trade is slowing down. This shows that the impact of the financial crisis is broad geographically and will worsen before it gets better," said Bisignani.

 "The industry crisis is deepening and no region is immune. Urgent measures are needed. From taxation to charges and operational efficiencies, all areas impacting the business must be examined for ways to reduce costs and drive efficiencies. It's a matter of survival," said Bisignani.