Was 2009 the worst year for airlines ever? Yes according to IATA traffic figures for the full year, which were published this morning and show an industry-wide 3.5% slump passenger traffic last year and a 10% fall in cargo traffic. This marks the largest post-war decline in international scheduled air traffic, IATA estimating it has cancelled out two and a half years of passenger growth and three and half years of growth in the freight business.
You can read more from IATA on this here, but in brief passengers levels were 5% down in the three largest markets of North America, Europe and Asia. Growth continued though in the Middle East, traffic up almost 11%. Latin America, the only region whose carriers are expected to post a profit in 2009, was the only other region not to see traffic fall last year. Air cargo was down across all areas except modest growth in the Middle East, with double digits falls in North America, Europe and Africa.
Any reasons for cheer? Well passenger traffic in December was up 4.5% compared to the same month in 2008 – led by strong growth in the Middle East, Latin America and a recovering Asia-Pacific – while air cargo was up almost a quarter. But this merely clawed back the similar-sized falls endured in December 2008.
And while load factors during 2009 were largely stable as capacity was predominantly cut in line with reduced demand, yields have been hit. Despite a slight improvement in the yield picture in the latter part of the year, IATA still estimates industry yields remained between 5-10% down in December. So while traffic is returning, revenues are likely to take longer to recover, and IATA is still forecasting a loss of $5.6 billon for this year. This might not seem much like a postive, but after industry losses of $16.4 billion in 2008 and an expected $11 billion for 2009, crumbs of comfort are in short supply.
For more on where the airline industry is, watch our expert panel debate the challenges ahead in our special Airline Business Debate video.