Freight stabilizes, passengers drop

The International Air Transport Association (IATA) announced international traffic statistics for the month of February showing continuing deterioration in demand.

Passenger volumes fell sharply to 10.1% below 2008 levels (from the -5.6% recorded in January). The 5.9% reduction in capacitythe most aggressive since the sub-prime crisis begancould not keep pace with the fall in demand, pushing the February load factor down to 69.9% (3.2 percentage points below the same month in the previous year).

February international freight volumes were 22.1% below 2008 levels. This is the third consecutive month at more than 20% below previous year levels (-23.2 in January and -22.6% in December).
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The sharp drop in February passenger traffic shows the broadening scope of the crisis. Freight traffic, which began its decline in June 2008 before passenger markets were hit, has now had three consecutive months in the -22% to -23% range. We may have found a bottom to the freight decline, but the magnitude of the drop means that it will take time to recover,?said Giovanni Bisignani, IATA? Director General and CEO.

Bisignani warned that the burden of the crisis requires an industry response. ?his is not just an airline crisis. Efficiency must be a priority for the entire value chain. A 25% reduction in landing charges at Singapore Changi Airport and a 50%reduction at Malaysian Airports are major steps in the right direction. These are model programmes for others to follow,said Bisignani.

The priority for airlines around the world is survivalconserving cash and adjusting capacity to match demand. This means re-sizing and re-shaping the industry to deal with the US$62 billion (12%) fall in revenues expected this year. Airlines will be making some tough decisions to stay afloat as we head for industry losses of US$4.7 billion in 2009, said Bisignani.