Industry yet to reach bottom of cycle: European airlines

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Europe's major airlines posted a decrease in passenger numbers last year that was greater than the swingeing capacity cuts introduced to stem losses.

The Association of European Airlines (AEA) recorded 5.4 million fewer boardings in 2008, a total of 366 million passengers, and the organisation forecasts that it is not even approaching the bottom of the cycle.

"We have seen figures as weak as this on only three occasions in the last 25 years," says AEA secretary general Ulrich Schulte-Strathaus, citing the effects of the Chernobyl power plant explosion and US bombing of Libya in 1986, plus the 1991 Gulf conflict and the US terror attacks of 2001.

"This time the upheavals are economic and likely to be more powerful and longer-lasting than the external shocks of the past," he says.

Despite over half its members' reducing seat capacity last year - eight of those by more than 10% - overall traffic decline was still greater than the capacity reduction.

December's figures provide the most reliable barometer to current trends. Passenger traffic dropped 3.5% compared with December 2007, while cargo traffic showed a "catastrophic decline" of 21.4%, a decrease that the association says is the steepest on record.

The only region to buck the gloomy trend was Europe-Middle East which showed traffic up 6.3% and passenger numbers up 12.8% to record a marginal load factor rise of 0.4%.

Schulte-Strathaus insists, however, that the industry is not looking for subsidy and calls for pan-European air traffic control initiatives. "We are not jumping on the bail-out bandwagon," he says. "We are working closely with our regulators to identify ways in which pressures on the industry can be relieved.

"We cannot afford to take on any further cost burdens arising from ill-considered legislation and we desperately need the benefits of the 'Single European Sky' programme to begin."