Demand for air transport, cargo declines in June IATA

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Mumbai, Aug 4 (UNI) The global economic turbulance had led to a continuous slowdown, both in cargo and passenger demand growth for the aviation sector, according to the International Air Transport Association (IATA).

According to the international traffic data for June, released by the IATA here, Cargo demand growth contracted by 0.8 per cent compared to June 2007, while the passenger demand growth fell to 3.8 per cent, the lowest level since 2003. Passenger load factors dropped to 77.6 per cent, 1.2 percentage points below the 78.8 per cent recorded for June 2007.

''This is the slowest growth that we have seen, since the industry was hit by the SARS crisis in 2003. With consumer and business confidence falling and sky-high oil prices, the situation will get a lot worse,'' Giovanni Bisignani, Director General and CEO of IATA, said.

''The airline sector is in trouble. Losses this year could reach USD 6.1 billion, more than wiping out the USD 5.6 billion that airlines made in 2007. Falling demand and rising costs are re-shaping the industry,'' Mr Bisignani said. ''To survive the crisis, urgent action is needed. Airports and air navigation service providers must come to the table with efficiencies that deliver cost savings. Labour must understand that efficiency is the only path to job security. And governments must stop crazy taxation and give airlines the freedom to merge and consolidate where it makes business sense,'' he added.

The Global passenger traffic growth of 3.8 per cent was well below the 5.4 per cent recorded year-to-date. Capacity growth of 5.5 per cent outstripped demand, pushing the passenger load factor down to 77.6 per cent.

North American airlines saw demand growth drop to 4.4 per cent (sharply down from the 8.2 per cent growth recorded in May). Domestic traffic in the US contracted by almost four per cent. European airlines saw demand drop to 2.1 per cent (compared to 4.1 per cent in May). Declines in business confidence and industrial production in key European economies may well drive this further down, IATA said.

Asia Pacific airlines saw their international passenger traffic growth fall to 3.2 per cent in June from 4.5 per cent in May, influenced by weakening long haul destination economies and inflation concerns. Middle Eastern carriers saw their traffic growth slow to 9.6 per cent in June from 12.8 per cent in May. This is sharply down from the 18.1 per cent recorded in June 2007.

The 0.8 per cent decline in International freight traffic growth was the first decline seen since May 2005. Asia Pacific airlines led the contraction with a negative 4.8 per cent year-on-year decline for June traffic.

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