As the global airline industry took an 11.1 per cent hit in passenger numbers in March 2009 compared to the same period a year earlier, Middle Eastern carriers were the only ones to experience growth [4.7 per cent] in the month, according to the International Air Transport Association (Iata).
"This is an improvement from the 0.4 per cent growth in February, and represented an expansion of market share. But this was out of balance with the 13.1 per cent increase in capacity," Iata said yesterday in a statement.
The aviation trade body recently said it expects the Middle Eastern airlines to lose $900m (Dh3,306m) in 2009 owing to overcapacity, while airlines across the world would lose $4.7bn this year as a result of the global economic downturn.
While demand growth for air travel in the region is expected to reach 1.2 per cent this year, it will be overshadowed by the impact of a 3.8 per cent rise in capacity, according to Iata.
The global airline profitability remained weak in Q1 this year under pressure from further declines in traffic and sharp drops in yields, according to Iata.
"There is variation in outlook across the regions with Asia expecting further declines whereas in Europe and the Middle East the mood is a more positive," Iata said.
Iata estimates international revenues in March will be impacted with a decline of up to 20 per cent. "Airlines cannot adjust capacity to match demand. Load factors have dipped sharply from last year. All of this is hitting revenues hard," said Giovanni Bisignani, Iata's Director-General and CEO.
It said carriers across the world cut international passenger capacity by 4.4 per cent in March resulting in an average load factor of 72.1 per cent, 5.4 percentage points below the average load factor recorded in March 2008. Freight demand, meanwhile, was relatively stable at -21.4 per cent compared to March last year.
"The global economic crisis continues to reduce demand for international air travel," said Bisignani.
"Like the rest of the economy, recovery in the air transport sector rests on a rise in consumer confidence and consumer spending. Shedding debt will be a major headwind," he said. Noting the deteriorating situation of many airlines, Bisignani urged governments to move forward with liberalisation.
Swine flu impact
The swine flu is slated to further impact global traffic, according to Iata. It said rising concerns over swine influenza could have a significant impact on traffic.
"Iata is working in close co-operation with the World Health Organisation to ensure an efficient response of the air transport industry to the challenges that swine influenza will present," said Giovanni Bisignani. "It is still too early to judge what the impact of swine flu will have on the bottom line. But it is sure anything that shakes the confidence of passengers has a negative impact on the business. And the timing could not be worse given all of the other economic problems airlines are facing," he added.
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