ID :
26437
Fri, 10/24/2008 - 23:29
Auther :
Shortlink :
http://m.oananews.org//node/26437
The shortlink copeid
AIRLINE INDUSTRY IN DIFFICULT TIMES, SAYS IATA
KUALA LUMPUR, Oct 24 (Bernama) -- International Air Transport Association
chief executive officer Giovanni Bisignani said the industry was in "difficult
times" and facing an "emergency situation," with declining cargo and passenger
traffic.
Passenger traffic declined 2.9 percent while cargo traffic dropped 7.7
percent compared with the same month in 2007. International load factors tumbled
by 4.4 percent percentage points from August to 74.8 percent in
September.
"The situation is difficult and becoming dramatically difficult. We are in
an emergency situation," he said, adding that even the good news that the oil
price has fallen to half its July peak was not enough to offset the impact of
the drop in demand.
He said the decline in cargo has been the biggest drop so far since the
technology bubble in 2001 and as for the passenger drop, it has been the lowest
since the SARS situation in 2003.
"At this rate, losses may be even deeper than our forecast US$5.2 billion
for this year," said Bisignani during a conference call from Istanbul,
Turkey.
He said even cuts in capacity were not able to keep pace with the fall in
demand for passenger traffic. September load factors in all regions fell
compared to August.
For September, all major regions reported that passenger traffic shrank,
with the exception of Latin American carriers which saw an increase of 1.7
percent but even this was shockingly down from the 11.9 percent growth of the
previous month.
Bisignani said up to August, the drop in international passenger traffic
was isolated to Asia Pacific carriers. The economies of the region's two major
growth markets - China and India - slowed and Japan saw industrial production
drop five percent in August.
The sharp downturn in world trade disproportionately impacted Asia-Pacific
carriers with a 6.8 percent drop in traffic in September. The steady five
percent international growth of North American carriers turned into a 0.9
percent contraction.
European carriers saw traffic drop from last year (-0.5 percent) as the
region's economies headed for recession.
After years of double-digit growth, passenger traffic by Middle Eastern
carriers turned to a negative 2.8 percent. While the region's oil-based economy
remains strong, the large portion of transit traffic exposes the region's
carriers to the global economic weakness.
African carriers posted the largest decline in traffic (-7.8 percent), a
continuation of the previous month's trend.
He said on a year-on-year comparison, the air freight in September was
almost "stagnant" with growth of 0.1 percent, 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 percent decline.
Europe and North American carriers, which had seen flat growth through
August saw cargo traffic fall 6.8 percent and six percent 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 freedom - access to markets and to global capital - that could help
them manage their business in this difficult time," he added.
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 on the eve of
the Agenda for Freedom Summit.
IATA has taken the extraordinary step of facilitating a discussion among
15 progressive governments on the future regulatory structure of international
air transport.
IATA circulated a paper among these governments examining solutions within
the bilateral system that could be quickly implemented to expand opportunities
for access to markets and to global capital.
"I hope that the Agenda for Freedom Summit will conclude as a successful
discussion that sparks a process of change by governments. We are not asking for
anything other than the basic freedom to do business that other industries take
for granted," said Bisignani.
-- BERNAMA
chief executive officer Giovanni Bisignani said the industry was in "difficult
times" and facing an "emergency situation," with declining cargo and passenger
traffic.
Passenger traffic declined 2.9 percent while cargo traffic dropped 7.7
percent compared with the same month in 2007. International load factors tumbled
by 4.4 percent percentage points from August to 74.8 percent in
September.
"The situation is difficult and becoming dramatically difficult. We are in
an emergency situation," he said, adding that even the good news that the oil
price has fallen to half its July peak was not enough to offset the impact of
the drop in demand.
He said the decline in cargo has been the biggest drop so far since the
technology bubble in 2001 and as for the passenger drop, it has been the lowest
since the SARS situation in 2003.
"At this rate, losses may be even deeper than our forecast US$5.2 billion
for this year," said Bisignani during a conference call from Istanbul,
Turkey.
He said even cuts in capacity were not able to keep pace with the fall in
demand for passenger traffic. September load factors in all regions fell
compared to August.
For September, all major regions reported that passenger traffic shrank,
with the exception of Latin American carriers which saw an increase of 1.7
percent but even this was shockingly down from the 11.9 percent growth of the
previous month.
Bisignani said up to August, the drop in international passenger traffic
was isolated to Asia Pacific carriers. The economies of the region's two major
growth markets - China and India - slowed and Japan saw industrial production
drop five percent in August.
The sharp downturn in world trade disproportionately impacted Asia-Pacific
carriers with a 6.8 percent drop in traffic in September. The steady five
percent international growth of North American carriers turned into a 0.9
percent contraction.
European carriers saw traffic drop from last year (-0.5 percent) as the
region's economies headed for recession.
After years of double-digit growth, passenger traffic by Middle Eastern
carriers turned to a negative 2.8 percent. While the region's oil-based economy
remains strong, the large portion of transit traffic exposes the region's
carriers to the global economic weakness.
African carriers posted the largest decline in traffic (-7.8 percent), a
continuation of the previous month's trend.
He said on a year-on-year comparison, the air freight in September was
almost "stagnant" with growth of 0.1 percent, 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 percent decline.
Europe and North American carriers, which had seen flat growth through
August saw cargo traffic fall 6.8 percent and six percent 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 freedom - access to markets and to global capital - that could help
them manage their business in this difficult time," he added.
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 on the eve of
the Agenda for Freedom Summit.
IATA has taken the extraordinary step of facilitating a discussion among
15 progressive governments on the future regulatory structure of international
air transport.
IATA circulated a paper among these governments examining solutions within
the bilateral system that could be quickly implemented to expand opportunities
for access to markets and to global capital.
"I hope that the Agenda for Freedom Summit will conclude as a successful
discussion that sparks a process of change by governments. We are not asking for
anything other than the basic freedom to do business that other industries take
for granted," said Bisignani.
-- BERNAMA
