September figures signal worst decline since 2001

Signalling the worst decline since the
technology bubble burst in 2001, the
International Air Transport Association
(Iata) announced last week that cargo
traffic had dropped 7.7% in September
compared to the same month in 2007.
International load factors tumbled by
4.4% percentage points from August to
74.8% in September.
“The deterioration in traffic is
alarmingly fast-paced and widespread,”
said Giovanni Bisignani, Iata’s director
general and CEO. “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 for this year,” said
Bisignani.
Declines in airfreight have slowed
year-to-date growth to 0.1%, with all
regions except the Middle East and Africa
reporting negative results.
The most alarming drop was with Asia
Pacific carriers – the largest players in the
market. The region’s carriers reported a
10.6% decline.
Europe and North American carriers,
which had seen flat growth through
August, saw cargo traffic fall 6.8% and
6.0% 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.