Airlines need to improve efficiency in 2009

[January 5th 2009]

As the airline crisis continues, leading industry body IATA says it will be crucial for airlines to operate more efficiently in 2009.

The latest figures from IATA (International Air Transport Association) show that airline passenger numbers fell by 4.6% globally in November. And planes were only 72.7% full – a fall of 3% on the same month in 2007.

“The industry is now shrinking by all measures. The 1% capacity cut in international passenger markets in November could not keep pace with the 4.6% fall in passenger demand. We can expect deep losses in the fourth quarter,” comments IATA director general and CEO, Giovanni Bisignani.

The 4.6% fall in the number of passengers in November compares to a fall of just 1.3% in October and 2.9% in September last year. IATA’s statistics show that airlines in Europe saw international traffic decline by 3.4% as all major markets, including North America, slumped.

Airlines in other regions fared even worse. North American airlines experienced a fall in international traffic of 4.8%. “With the near collapse of the investment banking sector and consequent reductions in business travel, North Atlantic travel slumped,” comments IATA. Airlines in the region have now started to cut capacity, shedding 0.8% in November after increasing capacity by 0.4% in October.

But the worse hit region was Asia-Pacific, where passenger numbers crashed by 9.7% in November following a fall of 6.1% in October. “While Chinese domestic traffic rebounded after the Olympics, travel to and from international markets continues to decline, reflecting the weakness in both global trade and consumer confidence,” says IATA.

The only region where airlines saw passenger numbers increase was the Middle East, where there was growth of 5.6%. “This is up from 3.5% growth in October, but represents a step-change from the double-digit expansion that characterized growth prior to the current financial crisis,” IATA points out.

The outlook for airlines remains bleak. “With no end in sight for the worsening global economy, the 2008 gloom will carry over into the new year. Relief in the oil price has been outstripped by the falls in demand and capacity cuts are not keeping pace. The industry is back in intensive care. Improving efficiency everywhere will be the theme for 2009,” concludes Bisignani.

Written by: Nick Purdom

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