Page last updated at 12:29 GMT, Wednesday, 27 January 2010

Iata says airlines suffered 'worst year' in 2009

Passengers queuing at check-in desk
Iata expects more passengers in 2010

The year 2009 saw the biggest decline in air passenger traffic in the post-war era, according to the International Air Transport Association (Iata).

"In terms of demand, 2009 goes into the history books as the worst year the industry has ever seen," said the group's boss Giovanni Bisignani.

Passenger traffic dropped by 3.5% from a year earlier, while freight traffic fell 10.1% as the downturn hit demand.

However, figures for December showed a rise in traffic of 1.6% on a year ago.

'Spartan year'

Despite the improvement at the end of 2009, Iata said 2010 would be a tough year for airlines the world over.

"The industry starts 2010 with some enormous challenges," Mr Bisignani said.

"The worst is behind us, but it's not time to celebrate. Adjusting to 2.5 to 3.5 years of lost growth means that airlines face another spartan year, focused on matching capacity carefully to demand and controlling costs."

African airlines suffered the most in 2009, with passenger demand down 6.8%.

Asia-Pacific and North American carriers saw demand fall by 5.8%, while European airlines suffered a 5% fall in demand.

But Middle Eastern carriers saw passenger demand climb 11.3%, while Latin American airlines experienced a 0.3% rise.

Price wars

Iata has estimated that airlines collectively lost $11bn (£6.8bn) last year, and stand to lose a further $5.6bn this year.

Analysts said that price cuts designed to attract customers would continue to eat into airlines' profits.

"Continued fare wars between airlines mean that yields and profitability will be low. Airlines are struggling to fill their airplanes and discounted ticketing has done little to alleviate the pressures on their costs," said Saj Ahmad, analyst at FBE Aerospace.

"Capacity has come out of the global airline system, but until a few airlines perhaps exit the industry through bankruptcy or mergers, there is still a very long road until we see serious stability, let alone growth."



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