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Global international passenger traffic declined 2.9 per cent and cargo traffic 7.7 per cent year on year last month, reports the International Air Transport Association (IATA).

International load factors also tumbled 4.4 per cent month on month to 74.8 per cent.

"The deterioration in traffic is alarmingly fast paced and widespread. We have not seen such a decline in passenger traffic since Sars [sudden acute respiratory syndrome] in 2003," said director-general and CEO Giovanni Bisignani. "Even the good news that the oil price has fallen to half its July peak is not enough to offset the impact of the drop in demand. At this rate, losses may be even deeper than our forecast US$5.2 billion [Bt181 billion] for this year."

This is the first time since the Sars crisis in 2003 that global passenger traffic has shrunk. Capacity cuts were not able to keep pace with the fall in demand. September load factors in all regions fell from August.

Last month, all major regions reported that passenger traffic shrank, with the exception of Latin American carriers, which saw an increase of 1.7 per cent. Even this is shockingly down from 11.9-per-cent growth in August.

Up to August, the drop in international passenger traffic was isolated to Asia-Pacific carriers. The economies of the region's two major growth markets - China and India - slowed, and Japan saw industrial production drop 5 per cent in August. The sharp downturn in world trade disproportionately impacted Asia-Pacific carriers with a 6.8-per-cent drop in traffic last month.

The steady 5-per-cent international growth of North American carriers turned into a 0.9-per-cent contraction.

European carriers saw traffic drop 0.5 per cent from last year as the region's economies headed for recession.

After years of double-digit growth, passenger traffic by Middle Eastern carriers dropped 2.8 per cent. While the region's oil-based economy remains strong, the large portion of transit traffic exposes the region's carriers to the global economic weakness.

African carriers posted the largest decline in traffic last month, 7.8 per cent, a continuation of August's trend.

For cargo, this is the worst decline since the technology bubble burst in 2001.

Declines in air freight have slowed year-to-date growth to 0.1 per cent, with all regions except the Middle East and Africa reporting negative results.

The most alarming drop last month was with Asia-Pacific carriers, the largest players in the market. They reported a 10.6-per-cent decline.

European and North American carriers, which had seen flat growth through August, saw cargo traffic fall 6.8 per cent and 6 per cent, respectively.

 "The industry crisis is deepening along with the crisis in the global economy. Airlines, like all other businesses, are facing enormous challenges. But unlike other companies, they are denied some basic commercial freedoms - access to markets and to global capital - that could help them manage their business in this difficult time," said Bisignani.

The web of 3,500 bilateral air-service agreements that govern international air transport denies market access until specifically agreed. And the ownership clauses that are contained in these agreements preclude mergers across borders.

"Look at what the banking industry is doing. They are taking government handouts. They are accessing global capital. And we have seen mergers without anybody asking to see the investors' passports. Airlines are not asking for handouts. But today's crisis highlights the need for airlines to be able to run their businesses like normal global businesses," said Bisignani from Istanbul on the eve of the Agenda for Freedom Summit.