Global traffic decline continues in October

 In the statement issued from Geneva on Thursday, IATA said international passenger traffic declined by 1.3 per cent compared to the same month in the previous year—a smaller decline than the 2.9 per cent drop experienced in September. The October load factor was 75 per cent, approximately 2 per cent below previous year levels. International air freight traffic contracted by 7.9 per cent in October for a fifth consecutive month of increasingly severe drops.

 "The gloom continues and the situation of the industry remains critical. While the drop in oil prices is welcome relief, recession is now the biggest threat to airline profitability. The slight slowing in the decline of passenger traffic is likely only temporary. The deepening slump in cargo markets is a clear indication that the worst is yet to come," said Giovanni Bisignani, IATA's Director General and CEO.

 In terms of the number of passengers, Asia-Pacific carriers, which represent 31 per cent of global international passenger traffic, saw passenger traffic decline by 6.1 per cent (slightly improved from the 6.8 per cent decline in September). A capacity reduction of 2.3 per cent could not keep pace with the drop in demand, taking load factors for the region's carriers to 72.2 per cent. Year-to-date growth for Asia-Pacific carriers fell to 0.3 per cent, the weakest growth outside of Africa.

 North American carriers saw international traffic decline by 0.8 per cent in October compared to the previous year, only slightly changed from the 0.9 per cent drop in September. European carriers saw traffic rebound slightly into positive territory with 1.8 per cent growth in October. While trans-Atlantic traffic growth was flat for the month, with both the European and US economies in recession further declines in international traffic for both regions' carriers are expected.

 In terms of cargo, the 7.9 per cent decline in air freight during October has dragged year-to-date air freight volume to 0.8 per cent below the same period in 2007. Forecasted declines in key air cargo sectors such as semi-conductors indicate that weakness is expected to continue.

 Asia-Pacific carriers, which account for 44.7 per cent of the international cargo market, saw international freight traffic decline by 11.0 per cent, reflecting the sharp drop in the region's exports.

 "As the global economic downturn re-shapes the world's financial industry, policy makers must also understand that change is needed in air transport. Unlike the finance industry, airlines are not asking for handouts. Commercial freedom, efficiency and a fair treatment in taxes are needed," said Bisignani.

 "We need commercial freedoms to run this as a normal business. IATA's Agenda for Freedom is building momentum among governments for access to markets and equity capital and the ability to merge or consolidate where it makes business sense. We need efficiency everywhere. At the top of the list is a Single European Sky by 2012 that would save 16 million tonnes of CO2 and over EUR 5 billion in operating costs. And we need common-sense in taxation. It was good news that the Belgian government has backed away from its plans to introduce a new departure tax. But the UK's decision to hike its Air Passenger Duty is a major step in the wrong direction. Air transport is a catalyst for economic growth. But plugging budget gaps with gratuitous travel taxes is bad policy that is not sustainable. This must change," said Bisignani.