Air traffic downturn shows too many flights

The difficulties that the airline industry is facing have worsened, as seen in the latest figures that have confirmed the largest decline in passenger numbers in five years.

Globally, the economic downturn was preceded by troubles in the airline industry, which saw more than 30 carriers fail as oil prices soared earlier in the year. The International Air Transport Association (IATA) has released new figures that show the financial crisis is making the situation in the industry even more difficult.

Last month, global traffic fell by 2.9 per cent, in the largest drop since the 2003 SARS outbreak in Asia, according to the IATA report. IATA’s chief executive, Giovanni Bisignani, has said that the fall in demand, which has been very rapid and is being felt around the world, could result in heavier losses than the $5.2 billion already anticipated for this year.

Staggering fuel costs earlier in the year grounded UK-based carriers Silverjet and Zoom, but the looming global recession is now posing a threat to some of the world’s largest carriers as passenger demand declines. Air France-KLM, rated as the largest airline in the world by revenue, issued a profit warning late last week, indicating it would be “very difficult” to meet its €1 billion target.

In other news, Ryanair closed its operations at a base in Spain due to a dispute over costs.

IATA also noted that the passenger load factor, or the percentage of seats sold per flight, had also dropped, from 78.8 per cent to 74.8 per cent, which is confirming analysts concerns that there are too many planes for the shrinking passenger base.

www.iata.org