The International Air Transport Association (IATA) said international passenger traffic dropped 4.6 percent and international cargo slumped 13.5 percent in November. International capacity dropped by 1.0 percent, it said in a statement sent to the Saudi Gazette. The November international passenger load factors stood at 72.7 percent which is a decline of approximately 3 percentage points over the same month last year. “The 13.5 percent drop in international cargo is shocking. As air cargo handles 35 percent of the value of goods traded internationally, it clearly shows the rapid fall in global trade and the broadening impact of the economic slowdown. By comparison, this is largest drop since 2001, in the aftermath of Sept.11,” said Giovanni Bisignani, IATA's director general and CEO. “The industry is now shrinking by all measures. The 1.0 percent capacity cut in international passenger markets in November could not keep pace with the 4.6 percent fall in passenger demand. We can expect deep losses in the fourth quarter,” he said. The November passenger decline of 4.6 percent is a considerable worsening from both the 1.3 percent demand contraction in October and the 2.9 percent fall in September. Asia-Pacific carriers face the most difficult operating environment with a 9.7 percent decline in November, following a 6.1 percent contraction in October. The region also had the most aggressive capacity cuts at -5.1 percent. 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. North American carriers saw international traffic decline by 4.8 percent - the second largest drop among the regions. Until August, the region's carriers had been shifting capacity to international markets. With the near collapse of the investment banking sector and consequent reductions in business travel, North Atlantic travel slumped. Carriers have started to cut international capacity with a 0.8 percent drop in November (following 0.4 percent growth in October) European carriers saw international traffic drop by 3.4 percent as all the region's major markets (intra-Europe, North Atlantic, and Asia) slumped. Smaller emerging markets fared better. African carriers saw traffic decline by 1.6 percent. This is a considerable improvement from the 12.9 percent drop in October, resulting from stronger intra-African traffic. Middle Eastern carriers saw traffic increase by 5.6 percent. This is up from 3.5 percent growth in October, but represents a step-change from the double-digit expansion that characterized growth prior to the current financial crisis. Latin American carriers saw a slight decline in growth to 3.3 percent (compared to 4.5 percent growth in October), buoyed by the region's positive, albeit slower, economic growth. Asia-Pacific carriers (representing 44.6 percent of global freight) saw freight traffic fall by 16.9 percent in November-the largest decline of any region. As freight accounts for a larger percentage of revenues for the Asia-Pacific carriers, fourth quarter profits for the region's carriers will be disproportionately (and negatively) impacted by the downturn in the global airfreight market. Double-digit freight declines were also experienced by Latin American carriers (-15.7 percent), North American carriers (-14.4 percent) and European carriers (-11.0 percent). Freight traffic for Middle Eastern carriers turned negative (-1.6 percent), following 1.0 percent growth in October. African carriers, while being the only region posting freight growth (2.2 percent), saw a decline from the 3.0 percent growth posted in October. Plummeting business confidence and the continuing turmoil in financial markets indicates that the worsening trend will be continued in December. “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 theme for 2009,” said Bisignani. __
