MANILA, Philippines – The worst is still far from over for the global air transport sector, with international traffic data for April showing a 3.1-percent decline in passenger demand and a 21.7-percent fall in cargo volume compared to the same period last year.
The International Air Transport Association (IATA) has warned that while April’s 3.1- percent passenger demand drop was even a clear improvement from the 11.1-percent fall in March, this should be viewed with caution.
IATA represents some 230 airlines, including those from the Philippines, with foreign routes, comprising 93 percent of scheduled international air traffic.
It noted that Easter holidays, which fell in April, positively skewed the data by at least two percent. Traffic gains were at the expense of yields in most regions. And preliminary data for May suggests a renewed double-digit decline, at least for European airlines.
Freight demand appears to have found a solid floor with a fifth consecutive month at more than 20 percent below previous year levels.
“We are not out of the woods yet. The demand improvements that we saw in April are welcome. But the 3.1-percent decline in passenger demand still outstripped the 2.5-percent cutback in capacity. There is no improvement in revenues as yields continue to fall. And freight remains at shockingly low levels. The worst may be over. However, we have not yet seen any signs that recovery is imminent,” according to Giovanni Bisignani, IATA’s drector gneral and CEO.
IATA also pointed out that while load factors improved to 74.4 percent in April from 72.1 percent in March, this is slightly distorted by high volume holiday travel. Forward schedules show a return to previous-year capacity levels by the end of the third quarter.
“Without a corresponding sharp improvement in demand, load factors are likely to decline rather than improve,” it said.
Asia Pacific carriers continued to experience the most significant passenger demand deterioration. Their 8.6-percent fall outstripped capacity adjustments of 7.4 percent.
Meanwhile, air freight continues at very weak levels. International cargo was down 21.7 percent in April compared to previous year levels, the fifth consecutive month in the 20-percent drop range.
“This sideways progression may indicate that we have seen the worst of the economic downturn. Business confidence is improving, but inventories remain high. Until inventories adjust to more normal levels, air freight volumes will likely continue to bounce along the bottom,” IATA said in its report.
Carriers in all regions showed double-digit declines in terms of cargo, with Asia Pacific carriers registering a 22.3-percent drop.
“With each day of the recession, the challenges for the air transport industry are mounting. Flexibility has never been more important. But there is not enough of it. Airlines remain constrained by old rules that restrict basic commercial freedoms such as access to markets and capital,” Bisignani said.
He added that much of the cost base remains out of our control – from volatile fuel prices to monopoly infrastructure charges. “And many governments simply don’t understand the need for urgent change. We need a change in mindset. To manage through this ongoing crisis, every player in the air transport value chain must be prepared to drive change,” he added. –Mary Ann Ll. Reyes, Philippine Star
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