Air travel hit by a slump in demand

AIRLINES will lose billions this year as they struggle to lift profits after the worst annual fall in passenger demand since the Second World War, industry data showed.

Carriers will miss out on an expected $5.6bn (£3.45bn) in 2010 as profits and revenue lag behind a demand growth rebound, the International Air Transport Association (IATA) said.

Passenger demand in 2009 dipped 3.5 per cent and the average load factor – which measures how full airlines’ aircraft were – was 75.6 per cent.

Freight fell 10.1 per cent with an average load factor of 49.1 per cent.

IATA’s director general and chief executive Giovanni Bisignani said the industry had lost 2.5 years of growth in passenger markets and 3.5 years of growth in the freight business.

“In terms of demand, 2009 goes into the history books as the worst year the industry has ever seen,” he said.

“Revenue improvements will be at a much slower pace than the demand growth we are starting to see. Profitability will be even slower to recover.”

International passenger capacity fell 0.7 per cent last month while freight capacity grew 0.6 per cent above December 2008.

Seasonally adjusted demand figures in December against November 2009 indicate a 1.6 per cent rise in passenger traffic while freight was flat with a 0.2 per cent decline.

December 2009 passenger demand improved 4.5 per cent compared to the same month in 2008, with a load factor of 77.6 per cent. While that was an 8.4 per cent demand improvement from the February 2009 low, it is still 3.4 per cent below the early 2008 peak.

Passenger demand for flights in the Asia-Pacific region fell by 5.6 per cent in 2009, while demand in Europe dropped five per cent and in North America by 5.6 per cent.